If a publicly traded firm wants its share price to rise from $20 to $25 and the required rate of return in the market is 10%,then the firm could

Question

Quizplus · Accepted Answer

Paying a dividend of $2.50 per year would likely attract more investors and increase demand for the stock, leading to a potential increase in share price. None of the other options directly address increasing the stock price to $25. A stock split or issuing more shares would only decrease the price per share, selling off a profitable line of business could potentially decrease future earnings and also not directly impact the stock price, and issuing bonds would not impact the stock price at all.

If a Publicly Traded Firm Wants Its Share Price to Rise