Applying the valuation procedure to common stocks is more difficult than applying it to bonds because

Applying the valuation procedure to common stocks is more difficult than applying it to bonds because



a. the size and timing of the dividend cash flows are less certain than the coupon payments for bonds.
b. common stocks have no final maturity date.
c. unlike the rate of return, or yield, on bonds, the rate of return on common stock is not directly observable.
d. All of the above are true.



Answer: D


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