Which of the following variables used in determining a stock's intrinsic value can be known with the greatest level of confidence?
A)future earnings
B)expected return on the market
C)the risk free rate of return
D)future dividends

Question

Quizplus · Accepted Answer

The risk-free rate of return can be known with the greatest level of confidence because it is based on Treasury securities, which are considered to have no risk of default. Future earnings, dividends, and market returns are all estimates and subject to uncertainty.

Which of the Following Variables Used in Determining a Stock's