When Using the Dividend Discount Model, Assuming That Growth (G)

question 7

Multiple Choice

When using the Dividend Discount Model, assuming that growth (g) will remain constant, the dividend yield is a good measure of the required return on a common stock under which of the following circumstances?

• A)g = 0
• B)g > 0
• C)g < 0
• D)Under no circumstances.
• E)Answers a and b are both correct.

---

Definitions:

Reinforcement Theory

A behavioral theory which suggests that behavior is influenced by its consequences, either through rewards or punishments.

Environmental Consequences

The effects or outcomes of actions on the natural environment, including pollution, biodiversity loss, and climate change.

Human Behaviour

The collection of actions exhibited by humans and influenced by culture, attitudes, emotions, values, ethics, authority, rapport, hypnosis, persuasion, coercion, and/or genetics.

Bandura

A psychologist known for his work on social learning theory, emphasizing the role of observational learning, self-efficacy, and reciprocal determinism in behavior.