If in the opinion of a given investor a stock\'s expected return exceeds its req

Question

If in the opinion of a given investor a stock's expected return exceeds its required return, this suggests that the investor thinks

Question 5 options:

dividends are not likely to be declared.

the stock is a good buy.

the stock should be sold.

management is probably not trying to maximize the price per share.

the stock is experiencing supernormal growth.

dividends are not likely to be declared.

the stock is a good buy.

the stock should be sold.

management is probably not trying to maximize the price per share.

the stock is experiencing supernormal growth.

Explanation / Answer

The stock is a good buy.

If the expected return exceeds the required return then it means the stock is a good buy for the investor because the return given by the stock is higher than the expectation.

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.