Which One of the Following Models Can Be Used to Value

question 25

Multiple Choice

Which one of the following models can be used to value the stock of a firm that maintains a one hundred percent retention ratio?

• A)two-stage growth
• B)residual income
• C)perpetual dividend growth
• D)supernormal growth
• E)perpetual cash flow

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Definitions:

True

In accordance with fact or reality, not false.

Proposition

A contention that represents a judgment or point of view.

Division

In mathematics, the operation of ascertaining how many times one number is contained within another; in logic, a fallacy that assumes what is true of the whole is also true of its parts.

Fallacy

An incorrect reasoning process that results in the invalidity of an argument.