Quiz Ch 09 – T/F Stock Equilibrium Criteria

Fundamentals of Financial Management, Concise

Brigham and Houston

09th Edition

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True or false: To establish stock equilibrium, two criteria are considered: (1) Does the stock's market price match the intrinsic value perceived by the marginal investor, and (2) Does the expected return on the stock viewed by the marginal investor correspond to this investor's required return? If either of these criteria (not necessarily both) is met, the stock is deemed in equilibrium.

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