A Decrease in Which of the Following Will Increase the Current

question 26

Multiple Choice

A decrease in which of the following will increase the current value of a stock according to the dividend growth model?

• A) Dividend amount
• B) Number of future dividends, provided the total number of dividends is less than infinite
• C) Dividend growth rate
• D) Discount rate
• E) Both the discount rate and the dividend growth rate

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Definitions:

Domain

The set of all possible input values (x-values) for which a given function is defined.

Rational Function

A function characterized by the ratio of two polynomials.

Domain

The set of all possible input values (x-values) for which a function is defined.

Rational Function

A function that can be expressed as the quotient of two polynomials.