The Current Expected Value of a Stock Is $32

question 3

Multiple Choice

The current expected value of a stock is $32. If investors demand a higher rate of return of 10 percent instead of the 8 percent rate of return, what will the impact on the stock price of the firm be?

• A)The stock price will increase by 10 percent.
• B)The stock price will not be affected by the change in the rate of return.
• C)The stock price will increase to $35.
• D)The stock price will reduce to zero.
• E)The stock price will decrease as a result of the higher rate of return demanded by investors.

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Definitions:

Hours Of Employee Training

The total time dedicated towards enhancing an employee's skills and knowledge through various training programs within a specific period.

Leading Indicators

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Lagging Indicators

Economic factors that change after the economy has already begun to follow a particular trend, used to confirm the trend.

Balanced Scorecard

A strategic planning and management system that organizations use to communicate what they are trying to accomplish, align day-to-day work with strategy, and measure and monitor progress toward strategic targets.