Using the Gordon Growth Model,a Stock's Current Price Decreases When

question 47

Multiple Choice

Using the Gordon growth model,a stock's current price decreases when

• A)the dividend growth rate increases.
• B)the required return on equity decreases.
• C)the expected dividend payment increases.
• D)the growth rate of dividends decreases.

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Definitions:

Accounts Receivable

The sum customers owe a corporation for goods or services delivered but not yet compensated.

Credit Balance

A situation in an account where the sum of credits exceeds the sum of debits.

Contra-Asset

An asset account where its balance is a negative figure, offsetting the balance of a related asset account.

Allowance for Doubtful Accounts

Allowance for doubtful accounts is an accounting provision that estimates the amount of receivables that may not be collectible due to customer defaults.