The Required Rate of Return for a Common Stock Is

question 16

Multiple Choice

The required rate of return for a common stock is defined as the:

• A)expected return given an assumed set of probabilities and expected cash flows on the stock.
• B)maximum expected return based on estimates of expected cashflows from the stock.
• C)minimum expected return necessary to induce an investor to purchase the stock.expected return after evaluation of the risk on the stock has been taken.