If the expected return is above the required return on an asset, rational investors will:
A) Buy the asset, which will drive the price up and cause expected return to reach the required return.
B) Sell the asset, which will drive the price down and cause the expected return to reach the required return.
C) Sell the asset, which will drive the price up and cause the expected return to reach the required return.
D) Sell the asset, since price is expected to decrease.
A
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The cost of retained earnings is less than the cost of new common stock because
A) flotation costs are incurred when new stock is issued. B) accounting rules allow a deduction when using retained earnings. C) dividends are not tax deductible. D) marginal tax brackets increase.
Which of the following is an example of a technology change within an organization?
A) forming teams to complete tasks B) workers using new software C) workers wanting to telecommute D) workers wanting flexible hours