The shareholders' required rate of return is the sum of the expected dividend yield and the expected
A) prime interest rate.
B) PE ratio.
C) stock price appreciation.
D) option premium.

Question

Quizplus · Accepted Answer

The shareholders' required rate of return is indeed the sum of the expected dividend yield and the expected stock price appreciation. This reflects both the income component (dividends) and the growth component (price appreciation) of an investment's return.

The Shareholders' Required Rate of Return Is the Sum of the Expected