Which of the following internal characteristics should cause investors to expect the highest rate of return?
A)a steady record of past dividends
B)interest and principal guaranteed by the U.S.government
C)a record of excellent management and consistent dividend payments
D)poor management and excessive use of debt financing

Question

Quizplus · Accepted Answer

Poor management and excessive use of debt financing increase the risk of the investment, which typically leads investors to expect a higher rate of return to compensate for the increased risk.

Which of the Following Internal Characteristics Should Cause Investors to Expect