Which One of the Following Sets of Dividend Payments Best

question 111

Multiple Choice

Which one of the following sets of dividend payments best meets the definition of two-stage growth as it applies to the two-stage dividend growth model?

• A) No dividends for five years, then increasing dividends forever
• B) $1 per share annual dividend for two years, then $1.25 annual dividends forever
• C) Decreasing dividends for six years followed by one final liquidating dividend payment
• D) Dividends payments that increase by 2, 3, and 4 percent respectively for three years followed by a constant dividend thereafter
• E) Dividend payments that increase by 10 percent per year for five years followed by dividends that increase by 3 percent annually thereafter

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