The Dividend Discount Model Assumes That

question 55

Multiple Choice

The dividend discount model assumes that:

• A) the dividend payout ratio will remain constant.
• B) the dividend growth rate is equal to the discount rate.
• C) discount rate increases at a constant rate.
• D) at least one dividend will be paid in the future.
• E) the dividend payout ratio increases at a constant rate.

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Definitions:

Atomic Weight

The average mass of atoms of an element, calculated using the relative abundance of isotopes in a naturally-occurring element.

Structural Formula

A type of chemical formula that shows the spatial arrangement of the atoms in a molecule. Compare with the simplest formula and molecular formula.

Molecular Formula

The type of chemical formula that gives the actual numbers of each type of atom in a molecule. Compare with simplest formula and structural formula.

Lewis Structure

A graphical representation of the valence electrons in molecules, showing how the atoms are bonded together and the lone pairs of electrons.