If a Stock Is Correctly Priced, Then You Know That

question 89

Multiple Choice

If a stock is correctly priced, then you know that ________.

• A) the dividend payout ratio is optimal
• B) the stock's required return is equal to the growth rate in earnings and dividends
• C) the sum of the stock's expected capital gain and dividend yield is equal to the stock's required rate of return
• D) the present value of growth opportunities is equal to the value of assets in place

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Definitions:

Acrophobia

Acrophobia is an intense fear of heights, often causing significant anxiety, discomfort, and avoidance of situations involving elevation.

Generalization

The process in psychology by which a response is given to a similar stimulus as the one that originally triggered the response.

Somatoform Disorder

Psychological disorder in which the symptoms take a somatic (bodily) form without apparent physical cause.

Bodily Form

Refers to the shape or structure of the human body.