Which One of the Following Statements Is Correct Related to the Dividend

question 36

Multiple Choice

Which one of the following statements is correct related to the dividend growth model approach to computing the cost of equity?

• A)The rate of growth must exceed the required rate of return.
• B)The rate of return must be adjusted for taxes.
• C)The annual dividend used in the computation must be for Year 1 if you are Time 0’s stock price to compute the return.
• D)The cost of equity is equal to the return on the stock plus the risk-free rate.
• E)The cost of equity is equal to the return on the stock multiplied by the stock's beta.

---

Definitions:

Motivational Support

Emotional or verbal encouragement aimed at boosting someone’s willingness or drive to achieve their goals.

Providing Advice

The act of offering recommendations or guidance to others.

Housework Responsibilities

Housework responsibilities refer to tasks and chores associated with the running and maintenance of a household, including but not limited to cleaning, cooking, and laundry, which are traditionally unequally distributed among gender lines.

Less Housework

The phenomenon of spending reduced time or effort on household chores, which can be influenced by various social, economic, or personal factors.