A group of individuals got together and purchased all of the outstanding shares of common stock of DL Smith Inc. What is the return that these individuals require on this investment called?
A) Dividend yield
B) Cost of equity
C) Capital gains yield
D) Cost of capital
E) Income return

Question

Quizplus · Accepted Answer

The return that these individuals require on their investment in DL Smith Inc. is called the cost of equity, which is the rate of return that shareholders expect to receive from their investment considering the perceived risk. It includes both dividend yield and capital gains yield.

A Group of Individuals Got Together and Purchased All of the Outstanding