Which of the following is not a major variable that affects the aggregate stock market earning multiplier in a country? A) Required rate of return on common stock in the country B) Expected growth rate of dividends for the stocks in the country C) Composite dividend-payout ratio for common stocks in country D) Composite debt to equity ratio for firms in the country E) All of the above are major variables for a country's aggregate stock market earnings multiplier

Question

Quizplus · Accepted Answer

The composite debt to equity ratio for firms in a country is a variable that affects the cost of capital for companies, but it does not directly affect the aggregate stock market earning multiplier. The other variables listed (required rate of return, expected growth rate of dividends, and dividend-payout ratio) all directly affect the multiplier. Therefore, the correct answer is D, as it is not a major variable that affects the aggregate stock market earning multiplier in a country.

Which of the Following Is not a Major Variable That