Question 1. What are the three factors that influence the required rate of return by investors? What two components make up the required rate of return on common stock?
Question 2. What is risk premium and what were the risk premium on stocks and the maturity premium on treasury bonds for the ten year period? How is this determined?
Question 3. What are some ethical considerations of accounting and finance? If you follow all applicable rules and regulations, are you an ethical person? Why do many business managers feel that ethical behavior is essential to the profitability and survival of their firm?
Question 4. What information does a company's cash flow statement provide that is not available from the other financial statements? Be specific and cite at lease one example.