Which of the Following Statements Is False

question 13

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:

TSX

The Toronto Stock Exchange, a major stock exchange in Canada where shares of public companies are traded.

Outstanding Shares

The total number of shares of a corporation that are currently owned by investors, including restricted shares owned by the company's officers and insiders.

Fair Value

An estimate of the market price of an asset or liability, based on the current market conditions and the asset's characteristics.

Goodwill

The intangible asset that arises when a company acquires another for a price higher than the fair value of its net identifiable assets.