Question 11 Which of the following statements concerning the required rate of return on stocks is true? Hot yet answered Select one: Marked out of 9.00 a. If risk is reduced, the required return will decrease because more investors are risk- averse. P Flag question b. The required return on preferred stock is generally higher than the required return on common stock. C. The higher the risk, the higher the required return, other things being equal. d. The higher an investor's required rate of return, the higher the value of the stock. Question 12 Which of the following statements concerning stock valuation is most correct? Not yet answered Marked out of 1.00 P Flag question Select one: O a. The dividend valuation approach is more accurate than the free cash flow approach. b. When using the free cash flow method, interest-bearing debt must be subtracted from firm value to determine the stock value. C. The free cash flow method will result in a higher valuation than the dividend valuation method because cash flows are higher than dividends. d. The free cash method can only be used if a company does not pay dividends. Question 13 Which of the following statements concerning junk bonds is most correct? Not yet answered Marked out of 1.00 Select one: a. A rational investor will always prefer a AAA-rated bond to a junk bond. b. Junk bonds have higher interest rates than AAA-rated bonds because of the higher risk. c. Junk bonds may also be called low-yielding securities. d. Junk bonds are priced higher than AAA-rated bonds because junk bonds are more riksy. P Flag