When Using the Constant-Growth Dividend Valuation Model, Which of the Following

question 75

Multiple Choice

When using the constant-growth dividend valuation model, which of the following will lower the value of the stock?

• A) an increase in the required rate of return
• B) a decrease in the required rate of return
• C) an increase in the dividend payout ratio
• D) an increase in the growth rate of the dividends

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Definitions:

Southern Christian Leadership Conference

An African-American civil rights organization founded in 1957, which played a major role in the American civil rights movement.

Civil Rights

The rights of citizens to political and social freedom and equality, often protected by law against discrimination or repression.

Military-Industrial Complex

The concept of “an immense military establishment” combined with a “permanent arms industry,” which President Eisenhower warned against in his 1961 Farewell Address.

Race Relations

The interactions and relations between people of different racial backgrounds, often focusing on the history, nature, and implications of racism and racial discrimination.