The Required Return

question 36

Multiple Choice

The required return:

• A)tends to be low for the share of a firm which is experiencing rapid growth
• B)provides an estimate of the return an investor might expect if he or she purchases a share at today's market price
• C)places more emphasis on the capital gains yield than on the dividend yield
• D)is based on the assumption that a share will maintain a constant dividend
• E)is based on the projected dividend and share price for next year

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Definitions:

Materials Price Variance

The difference between the actual cost of materials and the standard cost multiplied by the actual quantity used.

Standard Price

The anticipated or predetermined cost of a product, often used as a reference for evaluating actual costs.

Gallons

A unit of measurement for volume, commonly used to measure liquids.

Direct Labor Price Variance

A measure used in managerial accounting to calculate the difference between the actual cost of direct labor and the expected (or standard) cost, affecting the overall cost of production.