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samualson samualson
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Posts: 2459
5 years ago
Using the dividend valuation method, an analyst determines the value of Company A's stock to be $10 and the value of Company B's stock to be $14. Based on this information, which of the following statements is most accurate?
A) Company B must be riskier than Company A, and risk requires a reward.
B) Other things being equal, if Company A and Company B have the same firm value, Company B must have more debt, thus leveraging its returns for the benefit of shareholders.
C) Other things being equal, if Company A and Company B have the same firm value, Company A may have more shares of stock outstanding than Company B.
D) Company B's required rate of return is higher than Company A's required return.
Textbook 
Foundations of Finance

Foundations of Finance


Edition: 9th
Authors:
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wrote...
5 years ago
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samualson Author
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5 years ago
Mind blown, I've bookmarked this site on told my friends
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5 years ago
Really appreciate that
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