A Problem with the Dividend Growth Model Is

question 39

Multiple Choice

A problem with the dividend growth model is:

• A)that it is difficult to estimate the value of any tax credits.
• B)that it is difficult to obtain market prices for shares listed on the stock exchange.
• C)that it is extremely sensitive to estimates of the future growth rate in dividends.
• D)none of the given options.

---

Definitions:

Lend Money

The act of giving money to another party under the agreement that it will be repaid, often with interest, at a future date.

Unanticipated Inflation

Inflation that occurs when the general level of prices rises at a rate that was not forecasted or expected by consumers, businesses, or economists.

Saving

The portion of income not spent on current consumption but rather set aside for future use.

Borrowing

The act of obtaining funds from another party with the promise to repay the principal amount along with interest or other charges.