Which of the Following Is Not a Component of the Gordon

question 136

Multiple Choice

Which of the following is not a component of the Gordon (or constant dividend growth rate) model for valuing stocks?

• A)a discount rate that reflects the riskiness of the stock
• B)a constant dividend growth rate
• C)next year's expected earnings
• D)next year's expected dividend

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Definitions:

Price Rises

Occurs when the cost of goods or services increases over a period of time, often due to factors like inflation, demand, or production costs.

Demand

The desire for a particular product or service coupled with the ability and willingness to pay for it.

Perfectly Elastic

A situation in economics where the quantity demanded or supplied responds infinitely or vastly to any change in price.

Elasticity Measures

These are metrics used in economics to assess how the quantity demanded or supplied of a good changes in response to changes in price or other factors.