When Using the Two-Stage Dividend Growth Model

question 52

Multiple Choice

When using the two-stage dividend growth model:

• A) g₁ cannot be negative.
• B) Pt = Dt/R.
• C) g₁ must be greater than g₂.
• D) g₁ can be greater than R.
• E) R must be less than g₁ but greater than g₂.

---

Definitions:

Red Herring Fallacy

A logical fallacy where irrelevant information is presented to distract from the actual issue.

False Dichotomy

A logical fallacy that presents two opposing options as the only possibilities, when in fact more options may exist.

Appeal to Popularity

The appeal to popularity is a logical fallacy that suggests something is true, good, or desirable simply because it is popular or widely accepted by many people.

Complexity

The state or quality of being intricate or complicated.