As the Interest Rate Rises,the Present Value of a Given

question 42

Multiple Choice

As the interest rate rises,the present value of a given perpetual stream of income

• A) increases.
• B) decreases.
• C) does not change.
• D) approaches infinity.

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Definitions:

Income Tax Rate

The percentage of income that is paid to the government as tax, which can vary by income level, jurisdiction, and type of taxpayer.

Dividends Declared

The announcement by a company's board of directors of the intention to pay dividends to shareholders.

Book Value

The net value of a company's assets minus its liabilities, as recorded on its balance sheet, often used to assess its financial health.

Dividends Paid

The total amount of dividend payments issued to shareholders during a particular period.