Figure 4-8 -Refer to Figure 4-8.The Movement from Point a to Point

question 485

Multiple Choice

Figure 4-8

-Refer to Figure 4-8.The movement from Point A to Point B represents a(n)

• A) increase in the price.
• B) decrease in the quantity supplied.
• C) shift in the supply curve.
• D) Both a) and b) are correct.

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Definitions:

ROE

Return on Equity, a financial ratio that measures the profitability of a business in relation to shareholder’s equity, indicating how well a company uses investments to generate earnings growth.

Dividend Growth Rate

The annualized percentage rate of growth of a company's dividend payments.

Constant Growth DDM

A valuation model for stocks that assumes dividends grow at a constant rate in perpetuity, used to calculate the present value of future dividend payments.

Intrinsic Value

The true, inherent, or fundamental value of an asset, based on both tangible and intangible factors, as opposed to its market price.