Which of the Following Is an Advantage of the Dividend

question 42

Multiple Choice

Which of the following is an advantage of the dividend growth approach over the SML in estimating the required return on equity?

• A)The dividend growth model uses market information but the SML does not.
• B)Dividend growth is known,whereas estimating beta for the SML is an art form.
• C)It is easy to fit flotation costs into the dividend growth model but not the SML.
• D)All are advantages of the dividend growth model for estimating the required return on equity.

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Definitions:

Deviance

Behaviors, actions, or conditions that violate societal norms or expectations, which can lead to social stigma or sanctions.

Gang Member

An individual who is part of an organized group, often involved in criminal activities, sharing a common identity and goals.

Social Control Theory

Theory that explains deviance as the result of the weakening of social bonds.

Deviant Behavior

Actions or behaviors that violate societal norms and expectations, often eliciting negative social reactions.