1. What are the three factors that influence the required rate of return by investors? 2....

Transcribed Image Text:

1. What are the three factors that influence the required rate of return by investors? 2. Why is a change in required yield for preferred stock likely to have a greater impact on price than a change in required yield for bonds? 3. What two components make up the required rate of return on common stock? 4. In computing the cost of capital, do we use the historical costs of existing debt and equity or the current costs as determined in the market? Why? ### Note: 1. Your assignment should be 2 to 3 pages in length and written in APA Style format. 2. Include a tile and reference page (minimum of 3 reputable references) 3. Double-space and 1-inch margins 4. Paraphrasing of content, which demonstrates that you understand the content by summarizing in your own words. Direct quotes should be used minimally. 1. What are the three factors that influence the required rate of return by investors? 2. Why is a change in required yield for preferred stock likely to have a greater impact on price than a change in required yield for bonds? 3. What two components make up the required rate of return on common stock? 4. In computing the cost of capital, do we use the historical costs of existing debt and equity or the current costs as determined in the market? Why? ### Note: 1. Your assignment should be 2 to 3 pages in length and written in APA Style format. 2. Include a tile and reference page (minimum of 3 reputable references) 3. Double-space and 1-inch margins 4. Paraphrasing of content, which demonstrates that you understand the content by summarizing in your own words. Direct quotes should be used minimally.

Answer rating: 100% (QA)

1 The three factors that influence the required rate of return by investors 1 Interest Rates Changes in shortterm interest rates mainly as a result of Federal Reserve action in the United States induc... View the full answer