For a Stock to Be in Equilibrium, Two Conditions Are

question 130

True/False

For a stock to be in equilibrium, two conditions are necessary: (1) The stock's market price must equal its intrinsic value as seen by the marginal investor and (2) the expected return as seen by the marginal investor must equal this investor's required return.

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Definitions:

Cerebral Peduncles

Two stalk-like structures at the base of the brain that connect the cerebrum to the lower parts of the brainstem, involved in motor function control.

Internal Capsule

A white matter structure situated in the brain consisting of nerve fibers that connect the cerebral cortex with the brainstem, playing a crucial role in motor control.

Wernicke Area

A region in the brain's temporal lobe associated with processing and understanding spoken language.

Coherent Speech

The ability to produce clear, logical, and consistent verbal communication.