__________In the Beta Coefficient Normally Causes __________In the Required Return

question 86

Multiple Choice

__________in the beta coefficient normally causes __________in the required return and therefore __________in the price of the stock, all else remaining the same.

• A) A decrease; a decrease; a decrease
• B) An increase; an increase; a decrease
• C) An increase; a decrease; an increase
• D) An increase; an increase; an increase

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Definitions:

Common Stock

A type of security that represents ownership in a corporation, granting holders voting rights and a share in the company’s profits via dividends.

Treasury Shares

Shares that were once part of the circulating supply of stock but were subsequently reacquired by the issuing company, reducing the amount of outstanding stock on the open market.

Financing Activities

Processes that involve the flow of cash between a company and its owners and creditors, affecting the equity and debt of the business.

Cash Flow

The total amount of money being transferred into and out of a business, primarily affecting the company's liquidity.