The Model Used to Value the Stock of a Firm

question 83

Multiple Choice

The model used to value the stock of a firm which has a short-term growth rate that varies from its long-term growth rate is called the ________ dividend growth model.

• A)flexible
• B)increasing
• C)two-stage
• D)stepped up
• E)geometric

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Definitions:

Note

A written promise to pay a specified amount of money at a certain time, often used in finance as a type of informal loan agreement or debt instrument.

Nonnegotiable

indicates an item that cannot be transferred or assigned to another party through endorsement or delivery.

Purchase Price

The amount of money paid or to be paid by the buyer to acquire ownership of a good, service, or property.

Federal Law

Legislation enacted by the national government of a country; in the United States, laws passed by Congress and signed by the President.