An Investor Who Requires a 12% Percent Return for a Stock

question 115

Multiple Choice

An investor who requires a 12% percent return for a stock that pays no dividends and requires a 9% return for a stock that pays its entire return from dividends is most likely a proponent of

• A) the bird-in-the-hand dividend theory.
• B) the residual dividend theory.
• C) the clientele effect.
• D) the information effect.

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Definitions:

Productive

Referring to the ability to generate or create new ideas, objects, or processes that are useful or valued.

Syntactic Rule

Guidelines that govern the construction of phrases and sentences in languages to ensure meaningful communication.

Lexical Insertion Rule

A principle in linguistics that dictates how words are inserted into a sentence structure to conform to the syntactic constraints of the language.

Referentiality

The property of words or symbols to refer to objects, actions, or ideas beyond themselves.