In the one-period valuation model, the current stock price increases if
A) the expected sales price increases.
B) the expected sales price falls.
C) the required return increases.
D) dividends are cut.

Multiple Choice

Related questions

Q 5

In the one-period valuation model, the value of a share of stock today depends upon
A) the present value of both the dividends and the expected sales price.
B) only the present value of the future dividends.
C) the actual value of the dividends and expected sales price received in one year.
D) the future value of dividends and the actual sales price.

Q 7

In the one-period valuation model, an increase in the required return on investments in equity
A) increases the expected sales price of a stock.
B) increases the current price of a stock.
C) reduces the expected sales price of a stock.
D) reduces the current price of a stock.

Q 8

In a one-period valuation model, a decrease in the required return on investments in equity causes a(n) ________ in the ________ price of a stock.
A) increase; current
B) increase; expected sales
C) decrease; current
D) decrease; expected sales