The Minimum Rate of Return Necessary to Attract an Investor

question 105

Multiple Choice

The minimum rate of return necessary to attract an investor to purchase or hold a security is referred to as the

• A) stock's beta.
• B) investor's risk premium.
• C) investor's required rate of return.
• D) risk-free rate.

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Definitions:

Cost Reduction

The process of identifying and eliminating unnecessary costs to improve a company's profitability.

Product Innovation

The creation and introduction of new or significantly improved goods or services in the market.

Management Accounting System

A system used by businesses to provide financial and statistical information to managers for making short-term and long-term decisions.

Shareholder Value

The value delivered to shareholders of a corporation through dividends and appreciation of the company's stock price.