When Using the Dividend Discount Model, Assuming That Growth (G)

question 47

Multiple Choice

When using the Dividend Discount Model, assuming that growth (g) will remain constant, under which of the following circumstances will the dividend yield be equal to the required return on a common stock (rs) ?

• A) g = 0
• B) g > 0
• C) g < 0
• D) g = rs
• E) g > rs

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Definitions:

Fewer Concessions

Making minimal compromises or yielding less in negotiations to achieve one's own objectives.

Social Contract

A theoretical agreement within a society in which individuals consent to surrender some freedoms in exchange for protection of essential rights and social order.

Defend

To protect from harm, danger, or challenge through argumentation or physical measures.

Ethics

Principles and standards governing the conduct of individuals or organizations, often reflecting societal values of right and wrong.