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:

Ayn Rand

A Russian-American writer and philosopher known for developing a philosophical system called Objectivism.

Destructive Idea

A concept or belief that is harmful or detrimental to individuals or society as a whole.

Altruism

The principle or practice of caring for the well-being of others selflessly.

Stoics

Ancient philosophers who promoted the idea of enduring pain or hardship without displaying feelings or complaining, focusing on inner peace and rational understanding.