George, Jerry, and Harry Are Passengers on a Flight from Chicago

question 21

Multiple Choice

George, Jerry, and Harry are passengers on a flight from Chicago to New York.They injure their legs when their seatbelts do not fasten during take-off.The airline is sued by all three together for injuries caused and the airline is found to be negligent and is directed by the court to pay damages to the injured parties.Which of the following parties is entitled to recover maximum damages?

• A)George, a retired professor who gets a pension of $50, 000 a year
• B)Jerry, a football player who earns $2 million a year
• C)Harry, a chartered accountant who earns $200, 000 a year
• D)All the men recover the same amount of damages, irrespective of their income or profession.

---

Definitions:

Dividend Yield

A ratio indicating the amount of dividends a company distributes annually in relation to its share price.

Constant Growth Model

A model that estimates the value of a dividend-paying stock by assuming constant growth in dividends at a consistent rate.

Gordon Model

A financial model used to determine the value of a stock by considering the current dividend, the expected growth rate of dividends, and the required rate of return.

Dividend Pricing Models

Financial models used to determine the value of a stock based on the dividends it is expected to yield, taking into account future dividends and the discount rate.