The Underlying Assumption of the Dividend Growth Model Is That

question 372

Multiple Choice

The underlying assumption of the dividend growth model is that a stock is worth:

• A) The same amount to every investor regardless of their desired rate of return.
• B) The present value of the future income which the stock generates.
• C) An amount computed as the next annual dividend divided by the market rate of return.
• D) The same amount as any other stock that pays the same current dividend and has the same required rate of return.
• E) An amount computed as the next annual dividend divided by the required rate of return.

---

Definitions:

Breast Cancer

A type of cancer that forms in the cells of the breasts, affecting both men and women, though predominantly found in women.

Alcohol

A psychoactive substance found in drinks such as beer, wine, and spirits, ethanol is the type of alcohol suitable for human consumption.

Illicit Substance

A drug or chemical that is prohibited by law, often associated with addiction and illegal trafficking.

Marijuana

A psychoactive drug from the Cannabis plant used for medical or recreational purposes, known for its effects on mood, perception, and behavior.