When Evaluating a Project, the Dividend Growth Model

question 23

Multiple Choice

When evaluating a project, the dividend growth model:

• A)can only be used by firms that pay increasing dividends.
• B)must be used by all dividend-paying firms.
• C)is only applicable when the growth rate of the project exceeds the dividend growth rate.
• D)is relatively simple to use.
• E)must use the growth rate of the project as the rate of growth in the formula.

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