Which Securities Can Be Valued by Dividing the Annual Dividend

question 12

Multiple Choice

Which securities can be valued by dividing the annual dividend by the required rate of return?

• A) Low coupon bonds
• B) Junk bonds
• C) Common stocks
• D) Preferred stocks
• E) Constant growth common stocks

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Definitions:

Full Employment

Describes a situation where all available labor resources are being used in the most economically efficient way, typically with very low unemployment.

Production Possibilities Frontier

A diagram displaying the peak output scenarios for two different goods, given certain resources and influencing factors.

Economic Growth

An upswing in economic output regarding goods and services over a given time interval, typically evaluated using the Gross Domestic Product.

Improving Technology

The process of developing and applying new and better techniques, tools, and machines to increase efficiency, productivity, and quality in production or services.