The Cost of Common Stock Is Usually Greater Than the Simple

question 5

Multiple Choice

The cost of common stock is usually greater than the simple dividend yield because:

• A) investors perceive risk in common stock.
• B) investors expect both a current dividend and future growth.
• C) dividends are not tax-deductible.
• D) the company must make profits before it can pay dividends.

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Definitions:

Statue

A three-dimensional sculpture.

Kente Cloth

A type of silk and cotton fabric made of interwoven cloth strips and is native to the Akan ethnic group of South Ghana, known for its vibrant colors and designs.

Material

A substance or substances from which a thing is or can be made.

Kente Cloth

A traditional Ghanaian textile made of interwoven cloth strips, highly symbolic and often worn for special occasions with specific meanings tied to its colors and patterns.