The Dividend Valuation Model (DVM) Is Very Sensitive to the Growth

question 91

True/False

The dividend valuation model (DVM) is very sensitive to the growth rate (g) being used, because it affects both the model's numerator and its denominator.

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Definitions:

Annual Return

The percentage change in an investment's value over a one-year period, including dividends, interests, and capital gains.

Investment

The allocation of resources, usually financial, in something to earn a return or gain profit.

Equal Alternatives

A situation or choice where the options available have the same value or likelihood.

Frequency

A statistic specifying the number or proportion of items in a class that have a given property.