Assume That You Are Using the Dividend Growth Model to Value

question 27

Multiple Choice

Assume that you are using the dividend growth model to value stocks. If you expect the market rate of return to increase across the board on all equity securities,then you should also expect the:

• A) market values of all stocks to increase, all else constant.
• B) market values of all stocks to remain constant as the dividend growth will offset the increase in the market rate.
• C) market values of all stocks to decrease, all else constant.
• D) stocks that do not pay dividends to decrease in price while the dividend-paying stocks maintain a constant price.
• E) dividend growth rates to increase to offset this changE.

---

Definitions:

Infographic

An infographic is a visual representation of information or data, often incorporating charts, diagrams, and illustrations to make complex information easily understandable.

Gantt Chart

A visual tool in project management used to represent the timing of tasks required to complete a project, showing start and finish dates in a horizontal bar chart format.

Chartjunk

Excessive and unnecessary graphical elements in charts or graphs that distract from the data's intended message.

Critical Activities

Essential tasks or operations that must be performed to meet objectives or goals within a project or organization.