Study guides, Class notes & Summaries

(9-5) Required return 1). If in the opinion of a given investor a stock’s expected return exceeds its required return, this suggests that the investor thinks a. the stock is experiencing supernormal growth. b. the stock should be sold. c. the stock is a good buy. d. management is probably not trying to maximize the price per share. e. dividends are not likely to be declared. (9-1) Preemptive right 2). The preemptive right is important to shareholders because it a. allows managers to buy additi...