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

question 28

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:

Unfavourable Credit Report

A credit report indicating a history of missed payments or financial mismanagement, which can negatively impact a consumer's ability to secure loans or credit.

Jurisdictions

The official power to make legal decisions and judgments, often within a specific geographic area or over certain types of legal cases.

Refusal of Credit

The denial of a request for borrowing money based on an assessment of creditworthiness.

Credit Reporting Legislation

Laws regulating the collection, access, and use of credit information about individuals.