Author Question: If the expected return were above the required return, investors would buy an asset, driving its ... (Read 126 times)

mydiamond · **on:** Jul 10, 2018

If the expected return were above the required return, investors would buy an asset, driving its price up and its expected return down.

Indicate whether the statement is true or false

Question 2

Inkle, Inc has 200,000 of 10 bonds outstanding (which pay 20,000 interest) and 100,000 of 12 preferred stock (which pay 12,000 dividends). Assume that Inkle's earnings in the upcoming year will be either 50,000 or 100,000.

Given these two possibilities, common stockholders' share of earnings will be either ________ or ________.
A)

38,000; 88,000
B)

30,000; 68,000
C)

18,000; 68,000
D)

18,000; 88,000

bobsmith · **Reply #1 on:** Jul 10, 2018

Answer to Question 1

TRUE

Answer to Question 2

C

mydiamond · **Reply #2 on:** Jul 10, 2018

Correct answers!

bobsmith · **Reply #3 on:** Jul 10, 2018

Great! Please up vote

Author Question: If the expected return were above the required return, investors would buy an asset, driving its ... (Read 126 times)

mydiamond

If the expected return were above the required return, investors would buy an asset, driving its ...

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bobsmith

If the expected return were above the required return, investors would buy an asset, driving its ...

mydiamond

If the expected return were above the required return, investors would buy an asset, driving its ...

bobsmith

If the expected return were above the required return, investors would buy an asset, driving its ...