A decrease in market-wide interest rates will result in a/an

Question

Quizplus · Accepted Answer

A decrease in market-wide interest rates will result in a decrease in the cost of equity capital as investors will demand a lower rate of return given the lower prevailing interest rates. This can result in higher stock prices and lower capitalization rates. Options A, C, and D are incorrect as they describe outcomes that are the opposite of what generally occurs with a decrease in market-wide interest rates.

A Decrease in Market-Wide Interest Rates Will Result in A/an