1. The required rate of return on a corporate bond is often called the:

a. risk premium.

b. yield to maturity.

c. Inflation premium.

d. real rate of return.

2. When the growth rate is low, the dividend yield for common shares is expected to __________ in order to provide the required rate of return.

a. dividends.

b. cash flows.

c. stock prices.

d. earnings.