Using the Constant Growth Dividend Valuation Model and Assuming Dividends

question 92

Multiple Choice

Using the constant growth dividend valuation model and assuming dividends will growth a constant rate forever,the increase in the value of the stock each year should be equal to the

• A)growth rate in dividends,g.
• B)required return on the stock,r_cs.
• C)dividend yield plus the capital gains yield.
• D)dividend yield.

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Definitions:

React Negatively

To respond adversely or unfavorably to a situation, comment, or action.

Evidence

Information or data that is presented in support of an assertion, claim, or case, often in legal, scientific, or academic contexts.

Receptivity

The willingness or readiness to receive and consider new ideas or suggestions.

Planning Step

A phase in the process of developing a strategy or project that involves setting objectives and determining the means to achieve them.