If a Share Is Correctly Priced Then You Know That

question 24

Multiple Choice

If a share is correctly priced then you know that ________.

• A)the dividend payout ratio is optimal
• B)the share's required return is equal to the growth rate in earnings and dividends
• C)the sum of the share's expected capital gain and dividend yield is equal to the share's required rate of return
• D)the present value of growth opportunities is equal to the value of assets in place

---

Definitions:

Medicare Taxes

Taxes collected from earnings to fund the Medicare program, providing health insurance to individuals aged 65 and older or those who meet specific criteria.

FUTA

The Federal Unemployment Tax Act, which imposes a payroll tax on businesses to fund state workforce agencies.

SUTA

State Unemployment Tax Act, the legislation enabling state governments to collect unemployment insurance taxes from employers.

State Rate

A specific tax or fee rate determined by a state government, often applied to sales, income, or property.