)Which of the Following Is a Positive Statement

question 127

Multiple Choice

) Which of the following is a positive statement?

• A)An unemployment rate of 7 percent or higher is a national disgrace.
• B)Unemployment is a less important problem than inflation.
• C)When the national unemployment rate is 7 percent, the unemployment rate for inner­city youth is often
• Close to 40 percent.
• D)Unemployment and inflation are equally important problems.
• E)An inflation rate of 7 percent is too high.

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Definitions:

Plowing Back

The reinvestment of earnings by a company back into its own operation or projects, also known as retained earnings.

ROE

Return on Equity, a financial ratio that measures the profitability of a business in relation to shareholder’s equity, indicating how well a company uses investments to generate earnings growth.

Dividend Growth Rate

The annualized percentage rate of growth of a company's dividend payments.

Constant Growth DDM

A valuation model for stocks that assumes dividends grow at a constant rate in perpetuity, used to calculate the present value of future dividend payments.