The Underlying Assumption of the Dividend Growth Model Is That

question 77

Multiple Choice

The underlying assumption of the dividend growth model is that a stock is worth

• A)the present value of the future income provided by that stock.
• B)the same amount to every investor.
• C)an amount computed as the next annual dividend divided by the market rate of return.
• D)an amount computed as the last annual dividend divided by the required rate of return.
• E)the same amount as any other stock that paid the same dividend this year.

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Definitions:

Accounts Receivable Subsidiary Ledger

A detailed record that tracks individual balances owed by customers, supporting the total accounts receivable balance listed on the general ledger.

Accounts Payable Subsidiary Ledger

A detailed ledger breaking down accounts payable into individual supplier accounts, assisting in tracking what is owed to each creditor.

Adjustment Subsidiary Ledger

A detailed ledger that contains adjustments or modifications to accounts, used to support the primary accounting records.

Sales Returns And Allowances

Concessions granted to customers for returned goods or from granting reductions in the original sales price.