Which of the Following Statements Is FALSE

question 17

Multiple Choice

Which of the following statements is FALSE?

• A)Future dividend payments and stock prices are not known with certainty;rather these values are based on the investor's expectations at the time the stock is purchased.
• B)The capital gain is the difference between the expected sale price and the purchase price of the stock.
• C)The sum of the dividend yield and the capital gain rate is called the total return of the stock.
• D)We divide the capital gain by the expected future stock price to calculate the capital gain rate.

---

Definitions:

Fixed Cost

A cost that does not vary with the level of production or sales, such as rent, property taxes, and salaries.

Least-Squares Regression

A statistical technique used to determine the line that best fits a set of data points, minimizing the sum of the squares of the differences between the observed and estimated values.

Variable Cost

Expenses that change in direct proportion to the amount of production or the quantity of output generated.

Fixed Cost

Costs that remain constant in total despite changes in the levels of production or output within a certain range.