New information that might lead to a decrease in an asset's price might be
A)an expected decrease in the level of future dividends.
B)a decrease in the required rate of return.
C)an expected increase in the dividend growth rate.
D)an expected increase in the future sales price.

Question

Quizplus · Accepted Answer

An expected decrease in the level of future dividends can lead investors to perceive the asset as less valuable and therefore decrease its price. All other options - a decrease in the required rate of return, an expected increase in the dividend growth rate, and an expected increase in the future sales price - might actually lead to an increase in the asset's price.

New Information That Might Lead to a Decrease in an Asset's