Which of the following are reasons why it is more difficult to value common stock than it is to value bonds? -The rate of return required by the market is not easily observed.

Answers

Answer 1

It is more challenging to evaluate common stock than it is to value bonds since it is harder to see the rate of return demanded by the market. Option 1 is Correct.

For various reasons, including the absence of set cash flows, uncertainty, lack of a maturity date, market volatility, and market expectations, valuing common stock is seen to be more challenging than valuing bonds.

These elements make figuring out the fair value of a common stock—which is the present value of future cash flows from common stock—more challenging. Contrarily, bond valuations are frequently based on a known coupon rate and maturity date, making it simpler to calculate the present value of future bond cash flows. Option 1 is Correct.

Learn more about value bonds Visit: brainly.com/question/25965295

#SPJ4

Correct Question:

Which of the following are reasons why it is more difficult to value common stock than it is to value bonds? multiple select question.

1. the rate of return required by the market is not easily observed.

2. the life of a common stock is essentially forever.

3. all bond and stock cash flows are guaranteed to be paid.

4. common stock cash flows are not known in advance.


Related Questions

true/false. the birth of information technology such as texting and email is giving firms and employees increased flexibility to choose while staying competitive.

Answers

It is True that the birth of information technology such as texting and email is giving firms and employees increased flexibility to choose while staying competitive.

The birth of information technology has given firms and employees increased flexibility to choose while staying competitive. Information technology is the use of computers, software, and other electronic devices to manage information. Information technology has allowed firms to streamline their operations, reduce costs, and increase productivity.

With the advent of email and texting, communication between employees has become more efficient and convenient than ever before. This has allowed firms to stay competitive in a fast-paced business environment. Additionally, information technology has allowed employees to work remotely, which has given them greater flexibility in choosing where and when to work.

For example, employees can now work from home, which can help reduce the costs associated with commuting and childcare. Furthermore, information technology has allowed firms to stay competitive by allowing them to quickly respond to changes in the market. For example, firms can use data analytics to analyze customer behavior and adjust their marketing strategies accordingly.

Finally, information technology has also allowed firms to create new products and services that would have been impossible before. For example, the development of smartphones has created a new market for mobile applications. Overall, the birth of information technology has had a profound impact on firms and employees, giving them increased flexibility to choose while staying competitive.

For similar question on "Information Technology" :

https://brainly.com/question/4903788

#SPJ11

In the figure, curves A-D depict per capita rate increases (r). Which of the following best explains the difference between the shapes of these curves? Marked individuals have the same probability of being recaptured as unmarked individuals during the recapture phase.

Answers

The population growth rate within each curve steepens over time, as the growth rate depends on both the per capita growth rate and the current population size.

In exponential growth, the rate of population growth per capita (per capita) remains the same regardless of population size, and population grows more rapidly as size increases.

In nature, populations can grow exponentially for some time, but are ultimately limited by resource availability.

In logistic growth, the per capita growth rate of the population becomes smaller and smaller as the population size approaches the maximum imposed by the limited resources in the environment, known as carrying capacity.

Exponential growth produces a J-shaped curve, while logistic growth produces an S-shaped curve.

Bacteria grown in the laboratory are an excellent example of exponential growth. In exponential growth, the rate of population growth increases over time in proportion to the size of the population.  

To learn more about population growth, here:

https://brainly.com/question/18415071

#SPJ4

Complete question:

In the figure, curves A-D depict per capita rate increases (r). Which of the following best explains the difference between the shapes of these curves?

Consider the following disease scenarios, and determine the correct mode of transmission for each by dragging the labels to the appropriate description.
- Syphillis from unprotected sex
- Lyme disease
- Salmonellosis from egg salad at a picnic
- Chickenpox from one child coughing on another
- Hepatitis B from needle sharing
- MRSA

Answers

We can see here the disease scenarios, and their correct mode of transmission:

Syphilis from unprotected sex: Sexual transmissionLyme disease: Vector-borne transmission (tick bite)Salmonellosis from egg salad at a picnic: Foodborne transmissionChickenpox from one child coughing on another: Airborne transmissionHepatitis B from needle sharing: Parenteral transmission (through blood or bodily fluids)MRSA: Direct contact transmission (skin-to-skin contact or contact with contaminated objects)

What is a disease?

A disease is a particular abnormal condition that affects the body or mind of an organism, often characterized by specific symptoms and signs. It can be caused by various factors such as infections, genetic mutations, lifestyle choices, environmental factors, or a combination of these factors.

Diseases can range from minor ailments such as a common cold to more serious and life-threatening conditions such as cancer or heart disease.

Learn more about disease on https://brainly.com/question/1268202

#SPJ1

Other Questions
if you reduce the smount of added sugar in a product the total carbs in the product coefficient in a chemical reaction is a number that goes in front of an element or compound in a balanced equation. for example in the balanced equation below the coefficient in front of the h2o is 2, meaning 2 molecules of h2o are reacting to make 2 molecules of h2 and 1 molecule of o2. 2 h2o --> 2 h2 o2 what is the coefficient that goes in front of the eca in the reaction below. e3bc4 d(ca)2 --> d3(bc4)2 eca what is convergent wind Choose the correct pronoun for the underlined words in the below sentences. After other smaller German states had instituted liberal reforms in their territories, a confrontation occurred between revolutionaries and the Prussian army in Berlin. As a result, King Frederick William of Prussia while grocery shopping, you run into your sociology professor. this creates an awkward interaction because you are not used to seeing her outside of class and you are not sure how to behave. the interaction is awkward because it violated your group of answer choices audience segregation. status. sense of agency. social position. The ____ method for promotion budgeting is a simple and safe approach, but may not correctly allocate funds that may be necessary when a product faces an actual or anticipated downturn.PERCENTAGE OF SALES Charged ions such as sodium, potassium, and chloride are called ______. Ryan buys some jumpers to sell on a stall. He spends 190 buying 80 jumpers. He sells 50% of the jumpers for 12 each. He then puts the rest of the jumpers on a Buy one get one half price offer. He manages to sell half the remaining jumpers using this offer. How much profit does Ryan make? true/false. small claims courts, for the most part, resolve relatively minor disputes with maximum recoveries usually limited to a few hundred dollars at most. Which one of the following compounds behaves as an acid when dissolved in water?A. RaOB. RbOHC. C4H10D. HI _____ is usually preferred when the decisions of a company are very risky and low-level managers lack decision-making skills.Select one:a. Delegation of authorityb. Decentralizationc. Employee empowermentd. Centralizatione. Specialization Often, programmers list the ____ first because it is the first method used when an object is created.a. instanceb. constructorc. accessor When the price of radios decreases 5%, quantity demanded increases 5%. The price elasticity of demand for radios is ________ and total revenue from radio sales will ________. what device is used to shunt transient current to ground in the event of an indirect lightning strike? Q: Write An Article About the Topic: (At Least 1000 Words)"10 Weight Loss Tips To Reduce Weight At Home"Note:Kindly No Plagiarism & No Grammatical Mistake In the context of elements of the Committee of Sponsoring Organizations, identify a true statement about information and communications.Multiple ChoiceA. They address the policies and procedures that support the control environment.B. They are directed at supporting the control environment through fair and truthful transmission of information.C. They set the tone of an organization, influencing the control consciousness of its people.D. They are directed at providing assessment capabilities and uncovering vulnerabilities. What does sarah Bergbreiter mean by " there's still a long way to go"? In comparing himself to the Sun in the second stanza, the speaker makes all the following points EXCEPT:(A) The Sun cannot feel as he can.(B) The Sun returns, and so will he.(C) The Sun lacks his passion.(D) The Sun is slower paced than he will be.(E) The Sun has a shorter distance to travel than he does. A homogeneous beam of triangular cross section is subjected to a pure bending moment as shown in figure (a). Figure (b) indicates the cross section with centroid C as the origin of the coordinate system. In which point of the cross section is the magnitude of normal stress greatest? (a) y (b) fy Mz O (a) Point B O (b) Point C (c) Points A and B (d) Point A O (e) Not enough information to tell