The Required Return for a Common Stock Is Defined as The

question 44

Multiple Choice

The required return for a common stock is defined as the:

• A) expected return based on probabilities assigned to different scenarios.
• B) maximum expected return based on estimates of its cash flows.
• C) minimum expected return necessary to induce an investor to purchase the stock.
• D) mean return for the stock over the past ten years.

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Definitions:

Bequest

A gift left to someone in a will.

Personal Property

Moveable property that is not fixed permanently to one location, such as furniture, vehicles, and electronics, as opposed to real estate.

Testamentary Capacity

The legal ability of a person to make a valid will, including understanding the extent of their assets and the natural beneficiaries of those assets.

Mental Health

A state of well-being in which an individual realizes their own abilities, can cope with the normal stresses of life, can work productively and is able to make a contribution to their community.