Which of the Following Statements Is CORRECT

question 40

Multiple Choice

Which of the following statements is CORRECT?

• A) The constant growth model takes into consideration the capital gains investors expect to earn on a stock.
• B) Two firms with the same expected dividend and growth rate must also have the same stock price.
• C) It is appropriate to use the constant growth model to estimate a stock's value even if its growth rate is never expected to become constant.
• D) If a stock has a required rate of return rs = 12%, and if its dividend is expected to grow at a constant rate of 5%, this implies that the stock's dividend yield is also 5%.
• E) The price of a stock is the present value of all expected future dividends, discounted at the dividend growth rate.

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Definitions:

Social Conscience

An awareness of the societal impacts of one's actions and a sense of responsibility toward the community and the environment.

Housing

Refers to the provision or availability of accommodation, considered in terms of its quality, nature, and affordability.

Assisted-Living Facility

A residential option for elderly or disabled people who need help with daily activities but do not require the intensive medical care provided by a nursing home.

Institutionalized

The process of establishing something as a norm or standard within a structured system, or the condition of being admitted into a long-term care facility.