AICPA Sample exam question

  • This topic has 3 replies, 2 voices, and was last updated 2 months ago by Yello.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • #3088155
    Yello
    Guest

    An analyst expects a company to pay a dividend of $5 with a dividend growth rate of 3%. The inflation rate is expected to fall from 5% per year to 3% per year. As a result of the change in the inflation premium, the company's

    Stock price will likely decrease.
    Cost of equity will likely remain stable.
    Cost of equity will likely decrease.
    Stock price will likely remain stable.

    The answer is c. Can somebody please explain why? Thank you!

    #3088689
    monikernc
    Participant

    Look through these questions with solutions to grasp better the math and concepts behind the question.Your particular question is not on this but they all address the topic you are studying.

    http://userwww.sfsu.edu/li123456/sample2-819.doc

    AUD - 93
    BEC - 82
    FAR - 76
    REG - 88
    How have you been?
    Ninja book and MCQs and the forum, all first try! 2016
    Licensed State of Montana April Fool’s Day 2020
    State of Colorado June 2020 - AICPA Ethics 93
    Experience was the worst part of the journey for me. You?
    If you want things to change you have to do something different.
    #3089784
    CPAHOPE
    Participant

    It impacts the stock price when there is changes in inflation rate. Since stocks are part of equity, it wiĺl decrease the equity

    AUD - 39
    BEC - 76
    FAR - 56
    REG - 79
    FAR 57,61,57,56 (F*)

    REG 54,49,69,66, 79

    AUD 39(lol)

    BEC 64,60,50(lol),70,67,71,76

    "Theres no limit unless you allow it"

    "Why not?"

    "I dont believe in limits"

    #3090705
    Yello
    Guest

    Thanks!!

Viewing 4 posts - 1 through 4 (of 4 total)
  • You must be logged in to reply to this topic.