Exhibit 14.1 Use the Information Below for the Following Problem(S)

question 110

Multiple Choice

Exhibit 14.1
Use the Information Below for the Following Problem(S)
(1) The firm's expected rate of growth of earning per share
(2) The amount of capital invested in growth investments
(3) The rate of return earned on the funds relative to the required rate of return
(4) The required rate of return on the security based on its systematic risk
(5) The firm's dividend payout ratio
(6) The time horizon when these growth investments will be available
-Refer to Exhibit 14.1.In the listing above,which three factors influence the capital gain component of a growth company?

• A) 1, 3, and 5
• B) 2, 3, and 4
• C) 2, 3, and 6
• D) 3, 4, and 5
• E) 3, 4, and 6

---

Definitions:

Counterfactual Thinking

The mental process of imagining alternative outcomes or scenarios to events that have already occurred.

Hindsight Bias

The tendency to believe, after an event has occurred, that one would have predicted or expected the outcome, often described as the "I knew it all along" phenomenon.

Framing

The way information is presented to influence perceptions, choices, and understanding; often used in media, politics, and psychology.

IQ Tests

Standardized exams designed to measure human intelligence and cognitive abilities.