An Investor Who Requires a 17% Percent Return for a Stock

question 29

Multiple Choice

An investor who requires a 17% percent return for a stock that pays no dividends and requires a 13% return for a stock that pays its entire return from dividends is most likely a proponent of

• A) the bird-in-the-hand dividend theory.
• B) the residual dividend theory.
• C) the clientele effect.
• D) the information effect.