Question

A firm gives constant dividends historically. If its market share price doubles, its cost of equity becomes

Select one:

a. Half

b. Does not change

c. None of the above

d. Doubles​

Answer 1

Answer:

answer afor this question

Answer 2

A firm gives constant dividends historically. If its market share price doubles, its cost of equity becomes b. Does not change.

Explanation for the answer:

• Dividends affect the price of their underlying stock in a different variety of ways.
• The dividend history of a given stock plays an important and general role in its popularity.
• The announcement and payment of dividends also have a specific and predictable effect on the market prices.
• Hence, the correct answer among all the options is option b. Does not change.

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