Which of the Following Is Correct for Computing a Geometric

question 60

Multiple Choice

Which of the following is correct 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)} - 1
• D) [(D_N/D₀)]^{N + 1} - 1
• E) [(D_N/D₀)]^N - 1