What Is the Effect of an Increase in the Current

question 11

Multiple Choice

What is the effect of an increase in the current price of an investment?

• A)The approximate expected yield will increase.
• B)The approximate expected yield will decrease.
• C)The approximate expected yield will remain the same.
• D)The average annual current income will increase.
• E)The average annual current income will decrease.

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Definitions:

Earnings Per Share

A financial metric that calculates the portion of a company's profit allocated to each outstanding share of common stock.

Market Price

The present cost at which a service or asset is available for purchase or sale.

Par Value Common Stock

The nominal or face value assigned to common shares in the charter of a corporation, which has little relation to the market value.

Paid-in Capital

The amount of money shareholders have invested in a company in exchange for equity, excluding any earnings retained by the company.