If government bonds pay 7.0% interest and insured savings accounts pay 5.0% interest, stockholders in a moderately risky firm would expect return-on-equity values of
Had to look for the missing options and here is my answer:
The percentage that is expected that the stockholders in a moderately risky firm would be receiving as a return given that the government bonds pay 7.0% interest and an insurance of 5.0% interest for savings account, that would be above 7.0%. But, the exact amount here is not fixed or uncertain. Hope this helps.
If government bonds pay 7.0% interest and insured savings accounts pay 5.0% interest, stockholders in a moderately risky firm would expect return-on-equity values of
