1. Which of the following describes the required return on stock using discounted cash flows (DCF)?
a. bond yield plus 4% b. dividend yield plus growth rate c. future cash flows divided by required return d. growth rate minus the dividend yield Answer?
2. The cost of retained earnings is really a(n):
a. floatation fee. b. interest rate parity rate. c. opportunity cost. d. Treasury yield.
3. The net issue price on preferred stock is the current price _______ floatation costs.
a. divided by b. minus c. plus d. times