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Gains arised from entities activities
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- T/F: Risky assets on average do not earn a risk premium
- If you examine the U.S. stock market risk premium by extending the 1926 to 2015 time period backwards in time to 1802 (given the available information), the risk premiumA) decreases to 5.2 percent.B) increases to 7.6 percent.C) decreases to 3.9 percent.D) increases to 7.1 percent.E) decreases to 6.3 percent.
- Which of the following statements regarding profitable and unprofitable growth is FALSE?If a firm wants to increase its share price, it must cut its dividend and re-invest more of its earningsIf the firm retains more earnings, it will be able to pay out less of those earnings, which means that the firm will have to reduce its dividend.A firm can increase its growth rate by retaining (and reinvesting) more of its earnings.Cutting the firm's dividend to increase investment will raise the stock price if, and only if, the new investments have positive NPV.