The Cost of Equity Equals the Dividend Yield Minus the Growth

question 12

True/False

The cost of equity equals the dividend yield minus the growth rate in dividends for a constant dividend growth stock.

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Definitions:

Perceptual Constancies

A phenomenon in psychology where our perception of an object's characteristics (such as size, shape, and color) remains constant despite changes in the sensory input.

Size Constancy

The perceptual understanding that an object's size remains the same despite changes in the distance from which it is viewed.

Shape Constancy

The ability of the visual perception system to recognize an object's shape despite its orientation or the angle from which it is viewed.

Brightness Constancy

The psychological phenomenon where the perceived brightness of an object remains constant despite changes in the illumination conditions.