Inflation premium is the premium to compensate for: Multiple Choice the reduction in required rate of return to adjust for enhanced purchasing power. the increased business risk during periods of inflation. the increased financial risk during periods of inflation. the eroding effect of inflation on the value of the dollar. What someone is prepared to pay for a financial asset is called the: Multiple Choice Market asset. Inherent price. Intrinsic value. Current Market value. Which of the following is the valuation equation for common stock assumes constantly growing dividends? Multiple Choice Po = Do/ Ke Po=D1/9 Po=D1/ Ke Po=D1 (Ke-9)