Which One of the Following Is a Correct Formula for Computing

question 78

Multiple Choice

Which one of the following is a correct formula for computing a geometric average dividend growth rate?

• A) [(1 + D₀) + (1 + D₁) × (1 + D_N)]^{N + 1} - 1
• B) [(1 + D₀) × (1 + D₁) × (1 + D_N)]^{N - 1} - 1
• C) [D_N/D₀]^1/N - 1
• D) [D₀/D_N]^N - 1
• E) [D_N/D₀]^N/1 - 1