The Expected Return on a Common Stock Is Equal To

question 68

Multiple Choice

The expected return on a common stock is equal to:

• A) [(1 + dividend yield) × (1 + capital appreciation rate)] − 1.
• B) the capital appreciation rate + dividend yield.
• C) (1 + capital appreciation rate)/(1 + dividend yield).
• D) the capital appreciation rate − dividend yield.

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Definitions:

Expected Demand

Expected demand refers to the estimated quantity of a product or service that consumers will purchase at a given price level and time period, based on historical data, trends, and forecasting techniques.

Demand Per Day

The average quantity of a product or service that consumers buy or are expected to buy in a single day.

Mathematical Approaches

Techniques or methods derived from mathematics used to solve problems and make decisions in various fields.

Optimizing

The process of making something as effective, perfect, or functional as possible within given constraints.