The Arithmetic Average Dividend Growth Rate Is

question 112

Multiple Choice

The arithmetic average dividend growth rate is:

• A)the compounded rate of growth over a specified time period.
• B)easier to compute than the geometric average dividend growth rate.
• C)the summation of the annual dividend growth rates.
• D)generally preferred over the geometric average growth rate by most financial analysts.
• E)generally larger than the geometric average growth rate when the annual growth rates are positive.

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Definitions:

Production Possibilities Curve

A curve depicting all maximum output possibilities for two goods, given a set of inputs and technology.

Unemployment Rate

The fraction of the labor market actively in pursuit of work but is currently jobless.

Opportunity Cost

The expense associated with giving up the second-best choice in favor of opting for the preferred alternative in any decision-making process.

Production Possibilities Frontier

A graph that represents the highest possible production levels for two or more products, based on available inputs such as resources and labor.