CFA Practice Question

There are 191 practice questions for this study session.

CFA Practice Question

In the dividend discount model, a factor not affecting the discount rate (k) is the ______.

A. real risk-free rate
B. risk premium for stocks
C. return on assets
D. expected inflation rate
Correct Answer: C

User Contributed Comments 6

User Comment
danlan Why C?
wroger Return on assets has nothing to do with discount rate.
anricus Cost of Equity is made up of risk free rate + nominal rate of return.

(1+Nominal rate)=(1+real rate)*(1+inflation rate)

and Cost of Equity (Ke) = rf + premium
sam95 Because A,B and D are directly related in determining K where as C is not a part of K.
zeiad key => not
jonan203 C relates to financial statement analysis
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