Which of the Following Statements Is False

question 8

Multiple Choice

Which of the following statements is false?

• A) Estimating dividends, especially for the distant future, is difficult.
• B) A firm can only pay out its earnings to investors or reinvest their earnings.
• C) Successful young firms often have high initial earnings growth rates.
• D) According to the constant dividend growth model, the value of the firm depends on the current dividend level, divided by the equity cost of capital plus the grow rate.

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Definitions:

Marginal Cost

The outlay involved in producing an extra unit of a product or service.

Marginal Benefit

The increased pleasure or benefit received from consuming an additional unit of a product or service.

Stadium

A large, often outdoor structure for sports, concerts, or other events, featuring tiers of seats for spectators.

Pork-Barrel Legislation

Government spending for localized projects secured primarily to bring money to a representative's district, often criticized as wasteful and politically motivated.