It Is Important to Acknowledge That Growth or Dividend Pricing

question 34

Multiple Choice

It is important to acknowledge that growth or dividend pricing Models are essentially abstractions of reality and hence have serious practical limitations. The issues relating to accuracy include:

• A)estimates of growth rates.
• B)estimates of the market rate of interest.
• C)the fact that the denominator in the Gordon model is the difference between two numbers that can be close together.
• D)All of the above

---

Definitions:

Information Processing

A psychological model that describes how humans perceive, analyze, manipulate, and store information, akin to the functions of a computer.

Attention

Information processing involving the ability to strategically choose among and sort out different stimuli in the environment.

Selective Encoding

The process of focusing attention on relevant information while ignoring irrelevant information during problem solving and decision making.

Ambient Storage

A method of storage that does not require any artificial temperature control, relying instead on the ambient conditions of the surroundings.