Finance test 3 chapter 11

If a stock is overvalued, the price of the stock should

Decrease

Lower growth rates and higher beta coefficients suggest that the price of a stock should

Decrease

A decrease in a stocks beta coefficient implies that systematic risk

Decreases

An increase in the expected return on the market

Decreases a stocks valuation

In the dividend-growth model, an increase in the rquired return

Decreases the value of the stock

An increase in the P/E ratio

Does not affect a stocks beta coefficient

For a given stock price, an increase in earnings

Does not affect the P/S ratio, does not affect the P/B ratio, and decrease the P/E ratio

An increase in a stocks beta coefficient

Does not affect the firms dividends

An increase in the price - to - book ratio or an increase in the price - to - sales ratio suggests

Increased stock valuations

An increase in a stocks beta coefficient

Increases the required return

For a given required return, an increase in dividends

Increases the value of a stock

A lower numerical value of the beta coefficient implies

No change in a stocks unsystematic risk

If the book value of a corporation increases,

The P/B ratio decreases

If the price of a stock of a stock rises,

The P/E ratio increases