Which One of the Following Statements Is Correct

question 117

Multiple Choice

Which one of the following statements is correct?

• A)The capital gains yield is the annual rate of change in a stock's price.
• B)Preferred stocks have constant growth dividends.
• C)A constant dividend stock cannot be valued using the dividend growth model.
• D)The dividend growth model can be used to compute the current value of any stock.
• E)An increase in the required return will decrease the capital gains yield.

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Definitions:

Good

An item or product that is manufactured or produced for sale, or anything that serves a need or desire.

Right

A moral or legal entitlement to have or obtain something or to act in a certain way.

Central Authority

The main governing body or agency in a political or administrative system responsible for overseeing implementation of certain rules or policies.

Universal Standards

Generally accepted principles or criteria that apply globally across industries, cultures, or systems.