In the Constant Growth Dividend Valuation Model, the Required Rate

question 46

Multiple Choice

In the constant growth dividend valuation model, the required rate of return must be ____ the dividend growth rate in order for the formula price to be meaningful.

• A) less than
• B) equal to
• C) greater than
• D) proportional to

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Definitions:

Forced-distribution Method

A performance appraisal system where employees are ranked in groups and predetermined percentages of employees are placed in various performance categories.

Simple Ranking Method

The simple ranking method involves having the manager rank-order each member of a particular work group or department from top to bottom or from best to worst.

Performance Appraisal

A structured assessment process where an employee's effectiveness and achievements are reviewed and communicated by supervisors.

Central Tendency Error

A bias in performance appraisal where evaluators unfairly rate most employees around the average or middle of the scale.