According to the Gordon-Growth Model, What Is the Value of a Stock

question 66

Multiple Choice

According to the Gordon-Growth model, what is the value of a stock with a dividend of $2, required return on equity of 8% and expected growth rate of dividends of 4%?

• A)$25
• B)$26
• C)$50
• D)$52

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Definitions:

Analyze Group Means

Involves statistical evaluations of average values (means) obtained from different groups in an experimental study, to infer differences or similarities.

Variables

Elements, factors, or conditions that can change or vary, often considered in research or experiments to observe effects on outcomes.

Structure

The arrangement of and relations between the parts or elements of something complex, forming a coherent whole.

Mental Abilities

The capacity to perform cognitive tasks, understand complex ideas, learn from experience, reason, and solve problems.