Which of the Following Is a Problem Using the Dividend

question 29

Multiple Choice

Which of the following is a problem using the dividend discount model to value common stock?

• A)The model does not account for the risk of the stock.
• B)The model does not consider the present value of the dividends.
• C)The model does not consider that dividends may not be paid
• D)The model does not account for small dividends.

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Definitions:

Genetically Identical

Organisms or cells having the same DNA sequence in all of their genes.

Fraternal Twins

Twins that develop from two separate eggs fertilized by two different sperm cells, making them genetically distinct, unlike identical twins.

Equity Norm

The principle that fairness is achieved when individuals receive benefits proportionate to their contributions to the group, task, or relationship.

Equality Norm

A principle that emphasizes equal rights and opportunities for all individuals in a society.