Holding Everything Else Equal,if the Expected Return on My Company

question 10

Multiple Choice

Holding everything else equal,if the expected return on My Company stock increases from 10% to 15% and the expected return on That Company stock increases from 10% to 12%,the demand for My Company stock

• A)increases because the expected return has increased relative to the alternative asset.
• B)decreases because it is riskier.
• C)decreases because owners are now wealthier.
• D)increases because the expected return of That Company stock increased.

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Definitions:

Annual Salary

The total amount of money an employee is paid over the course of a year for their work, typically expressed as a yearly sum rather than hourly wages.

Partnership

A partnership is a legal form of business operation between two or more individuals who share management and profits.

Income Taxes

Taxes imposed by the government on the income generated by individuals or entities within its jurisdiction.

Liabilities

Financial obligations or debts that a company owes to others, which must be settled over time through the transfer of economic benefits.