Assume That You Are Using the Dividend Growth Model to Value

question 91

Multiple Choice

Assume that you are using the dividend growth model to value stocks.If you expect the market rate of return to increase across the board on all equity securities,then you should also expect the:

• A)market values of all stocks to increase, all else constant.
• B)market values of all stocks to remain constant as the dividend growth will offset the increase in the market rate.
• C)dividend growth rates to increase to offset this change.
• D)stocks that do not pay dividends to decrease in price while the dividend-paying stocks maintain a constant price.
• E)market values of all stocks to decrease, all else constant.

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Definitions:

Compromised Human Dignity

A state where an individual's respect, self-worth, and privacy are not honored or maintained.

Ego-Defense Mechanism

Psychological strategies unconsciously used to protect a person's ego or self-esteem from stress and harmful thoughts or feelings.

Denial

A psychological defense mechanism where a person refuses to accept the reality of a situation.

Dissociation

A psychological condition in which there is a disconnection between thoughts, identity, consciousness, and memory.