Question
Which TWO of the following statements are FALSE? A. Required return on equity is usually less than that for debt for any given firm. B.
Which TWO of the following statements are FALSE?
A. Required return on equity is usually less than that for debt for any given firm.
B. The growth rate in EPS is a function of the Dividend Payout Ratio (DPR), amongst other things.
C. The dividend growth model is used for share valuation purposes.
D. If the forecasted growth rate in Earnings per Share (EPS) decreases, this leads to a decrease in share price valuation.
E. As the yield to maturity of a bond goes up, the value of the bond goes up
F. Bond market conventions state compounding is as frequent as interest(coupon) payments
G. The price of a zero coupon bond is the present value of its face value.
H. A 1% change in yield will have more influence on a 10-year 10% $1,000 government bond than a 2-year 10% $1,000 government bond
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