The ____ Is Often Used to Estimate the Required Rate

question 86

Multiple Choice

The ____ is often used to estimate the required rate of return for any firm with public traded stock.

• A)capital asset pricing model
• B)Treynor index
• C)Sharpe index
• D)Treynor index AND Sharpe index

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Definitions:

Preferred Stock

A class of stock that carries with it the right to receive payment of dividends and/or the distribution of assets on the dissolution of the corporation before other classes of stock receive their payments.

Dividends

Net profits, or surplus, set aside for shareholders.

Dissolution

A change in the relation of partners caused by any partner ceasing to be associated in the carrying on of the business.

Limited Liability Company

A business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.