The Basic Assumption of the Gordon Growth Model Is That

question 23

Multiple Choice

The basic assumption of the Gordon growth model is that:

• A) Dividends will grow at a faster rate than the required return.
• B) No earnings will be retained by the firm to finance growth prospects.
• C) Bonds are perfect substitutes for common stock.
• D) Dividend payments will grow at a constant rate.
• E) The firm will never pay dividends.

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Definitions:

Communication

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Long Data Type

A data type in programming used to represent integer numbers larger than those that can be stored in an int data type.

Table Datasheet View

A display format in a database application that shows data in rows and columns, resembling a spreadsheet.