Question
Why is it more difficult to evaluate a share of common stock than it is to evaluate bonds? Multiple select question. The rate of return
Why is it more difficult to evaluate a share of common stock than it is to evaluate bonds? Multiple select question.
The rate of return required by the shareholders is not easily observed.
The life of a bond is essentially forever, which makes it easy to evaluate a bond.
Financial statements contain all the information related to bonds, but they do not provide any information related to common stock.
Common stock cash flows are not known in advance.
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Financial Accounting and Reporting a Global Perspective
Authors: Michel Lebas, Herve Stolowy, Yuan Ding
4th edition
978-1408066621, 1408066629, 1408076861, 978-1408076866
