Answer 33 Which of the following are advantages to being a s

Answer: 33. Which of the following are advantages to being a shareholder: 1. The expected returns for equities are higher than debt securities. 2. Equities have prices 1isted on major exchanges and are marketable. 3. Equities typically earn their expected return. 4. Equities that do not pay a dividend are tax efficient. a. 1 and 3. b. 2 and 4. C. 1, 2, and 4

Solution

Solution:

C. 1,2 and 4

- Since equities are subject to market risk , so they have higher rate of return in comparison of debt securiies. Debt Securities carry less risk , so less return.

-its true that listed securities are easily marketable due to the fact of they are more trustworthy and easily tradeable.

-Since return is depend on a lot of internal and external factor , so it canot be said that whether they earn expected return or not.

-those companies which do not pay dividend, make them tax efficient.