Which of the Following Statements Is False

question 12

Multiple Choice

Which of the following statements is false?

• A) An investor will be willing to pay up to the point at which the current price of a share of stock equals the present value of the expected future dividends of an expected future sale price.
• B) The expected total return of a stock should equal the expected return of other investments available in the market with equivalent risk.
• C) The total amount received in dividends and from selling the stock will depend on the investor's investment horizon.
• D) If the current stock price were greater than P₀ = , it would be a positive NPV investment, and we would expect investors to rush in and buy it, driving up the stock's price.