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Montreal Trust Corp

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Montreal Trust Corp.is facing reduced earnings.Its entire industry has been facing declining demand due to a severe recession; however, its share price has suffered more than the share price of its competitors.The market believes that Montreat Trust is fundamentally weaker than its competitors.Montreal Trust's CEO has decided to prop up the share price by increasing its dividend.He believes that, according to the dividend discount model (DDM), if Montreal Trust increases its dividend, then its stock price will rise.Why won't this work?


Definitions:

Systematic Identification

The methodical process of recognizing and categorizing entities based on established criteria.

Self-Evident Meaning

Something that is clearly or obviously understood without the need for explanation or justification.

Comprehend Two Languages

The ability to understand and process information in two different languages.

Mutually Intelligible

pertains to languages or dialects that can be understood by speakers of each without prior study or special effort.

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