If the Expected ROE on Reinvested Earnings Is Equal to K,the

question 81

Multiple Choice

If the expected ROE on reinvested earnings is equal to k,the multistage DDM reduces to

• A)V0= (Expected Dividend Per Share in Year 1)/k
• B)V0= (Expected EPS in Year 1)/k
• C)V0= (Treasury Bond Yield in Year 1)/k
• D)V0= (Market return in Year 1)/k
• E)none of the above

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Definitions:

Average Variable Cost

The total variable costs (costs that change with production volume) divided by the quantity of output produced.

Average Total Cost

The total cost of production divided by the quantity produced, representing the cost per unit of output.

Short Run

In economics, a period where at least one input, such as plant size or capital, is fixed and cannot be changed, contrasting with the long run where all inputs can vary.

Short Run

A period of time in economics during which at least one input is fixed, limiting the immediate capacity of businesses to adjust to market changes.