The Present Value of $10000 to Be Received in 5

question 66

Multiple Choice

The present value of $10000 to be received in 5 years will be smaller if the discount rate is

• A) increased.
• B) decreased.
• C) not changed.
• D) equal to the stated rate of interest.

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Definitions:

Yearly Dividend

The total dividend payment a company distributes to its shareholders annually, often expressed as a per share amount.

Common Shares

Equity securities that represent ownership in a corporation, giving holders voting rights and a share in the company's profits through dividends.

Reinvesting

The action of using profits or dividends from investments to purchase additional shares or assets, aiming to increase future earnings.

Annual Dividend

The total amount of dividend payments made to shareholders over a one-year period.