The Underlying Assumption of the Dividend Growth Model Is That

question 59

Multiple Choice

The underlying assumption of the dividend growth model is that a share is worth:

• A)the same amount to every investor regardless of their desired rate of return.
• B)the present value of the future income which the share generates.
• C)an amount computed as the next annual dividend divided by the market rate of return.
• D)the same amount as any other share that pays the same current dividend and has the same required rate of return.
• E)an amount computed as the next annual dividend divided by the required rate of return.

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