Which one of the following will increase the current value of a stock? A) Decrease in the dividend growth rateB) Increase in the required returnC) Increase in the market rate of returnD) Decrease in the expected dividend for next yearE) Increase in the capital gains yield

Question

Jacob Davis

Business

10 October, 18:22

Which one of the following will increase the current value of a stock? A) Decrease in the dividend growth rateB) Increase in the required returnC) Increase in the market rate of returnD) Decrease in the expected dividend for next yearE) Increase in the capital gains yield

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Answers (1)

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Haven Logan · Answer 1

C) Increase in the market rate of return

Explanation:

The market rate of return is an important concept of risk management as it determines the rate of premium of a product and hence increases the market rate and leads to an increase in the current values if stock and hence the current values depend on the past values of the stock.