The Constant Dividend Growth Model: I

question 23

Multiple Choice

The constant dividend growth model: I. assumes that dividends increase at a constant rate forever.
II) can be used to compute a stock price at any point of time.
III) states that the market price of a stock is only affected by the amount of the dividend.
IV) considers capital gains but ignores the dividend yield.

• A) I only
• B) II only
• C) III and IV only
• D) I and II only
• E) I, II, and III only

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