Using the Constant Dividend Growth Model, Which of the Following

question 57

Multiple Choice

Using the constant dividend growth model, which of the following components not be considered?

• A)current stock price
• B)dividend growth rate
• C)risk-free rate
• D)all the above are considered in the constant dividend growth model

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Definitions:

Dividends

Payments made by a corporation to its shareholders, usually as a distribution of profits.

Net Profits

The amount of income that remains after subtracting all expenses, taxes, and costs from total revenue.

Shareholders

Individuals or entities that own shares in a corporation, thereby having an interest in its performance and governance.

De Jure Corporation

A corporation whose existence is the result of incorporators having fully or substantially complied with the relevant corporation statutes.