Question: Based on the dividend-discount model, what do you think would happen to stock prices if there were a decrease in the perceived riskiness of domestic

Based on the dividend-discount model, what do you think would happen to stock prices if there were a decrease in the perceived riskiness of domestic real estate purchases?

If investors perceive domestic real estate purchases are less risky, then the relative riskiness of stocks will(Click to select)

rise

fall

.Stocks would become relatively(Click to select)

more

less

attractive, requiring a(Click to select)

smaller

larger

risk premium than before. From the dividend-discount model, we can see that a(Click to select)

rise

fall

in the risk premium would lead to a(Click to select)

fall

rise

in stock prices.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!