A manager is more confident of his or her assessment of a situation if it involves risk rather than uncertainty
Indicate whether the statement is true or false.
Answer: TRUE
Explanation: With risk, a manager is able to estimate the likelihood of specific outcomes. With uncertainty, not enough is known even to make estimates. So a manager would be more confident of a position involving risk.
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Generally the least expensive source of long-term capital is ________
A) retained earnings B) preferred stock C) long-term debt D) common stock
The discounted dividends valuation model of common stock assumes that dividends will grow at a constant rate forever. This method tells us that the (dividend next year) divided by the (required rate of return - growth rate) yields the
A) discounted dividend. B) dividend growth rate. C) value of the common stock. D) value of the earnings. E) value of the P/E ratio.