When Estimating the Cost of Equity Using the DDM,the Factor

question 16

Multiple Choice

When estimating the cost of equity using the DDM,the factor that is the most apt to add error to this estimate is the:

• A)value of the last dividend.
• B)firm's tax rate.
• C)historical beta.
• D)dividend growth rate.
• E)current stock price.

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Definitions:

Pka Values

Numerical values that measure the acidity of protons in molecules based on their ability to be donated in an aqueous solution.

Reagents

Substances added to a system to cause a chemical reaction or test if a reaction occurs.

Conversion

The process of changing or causing something to change from one form to another.

Standard Deviation

A measure of the dispersion or variability within a set of numerical data, indicating how far values are spread from the mean.