Which of the Following Statements Is CORRECT

question 33

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 rates 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:

Dizygotic Twin

Dizygotic twins, also known as fraternal twins, are siblings born from two separate eggs fertilized by two different sperm cells, resulting in them being genetically distinct, much like regular siblings.

Monozygotic Twin

Twins that are genetically identical as they were formed from a single fertilized egg that split into two, providing unique opportunities for research into the nature vs. nurture debate.

Biology

The systematic investigation of living entities and life forms, encompassing their anatomy, functionality, development, genesis, progression, and spread.

Brain Structures

Physical formations in the brain responsible for various functions, including thought, emotion, and sensory processing.