Which of the Statements Below Is FALSE

question 19

Multiple Choice

Which of the statements below is FALSE?

• A) In estimating the current price using the constant growth dividend model, we let g be the growth rate on the dividend stream and r be the rate of return required by the potential buyer of the stock.
• B) Constant growth means that the percentage increase in the dividend is the same each year.
• C) Div₀ refers to the dividends that were just been paid to the current owner of the stock
• D) One unlikely dividend pattern is to raise or grow dividends by a fixed amount at fixed intervals.

Understand the implications of earnings per share, price-earnings ratio, dividend payout ratio, and dividend yield ratio.

Calculate and interpret the book value per share.

Analyze investment ratios such as the dividend payout ratio and the dividend yield ratio.

Understand the concept and applications of mobile computing and commerce.

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Definitions:

Debt-to-equity Ratio

The ratio that demonstrates the comparative financing from shareholders' equity and debt for a company's assets.

Times Interest Earned Ratio

The Times Interest Earned Ratio measures a company's ability to meet its debt obligations by comparing its income before interest and taxes to its interest expenses.

Dividend Yield Ratio

A ratio that shows the annual dividends a company distributes in relation to its stock price.

Earnings per Share

A financial performance metric that calculates the portion of a company's profit allocated to each outstanding share of common stock, indicating the company's profitability.