Which of the Following Statements Is False

question 55

Multiple Choice

Which of the following statements is false?

• A) We cannot use the general dividend discount model to value the stock of a firm with rapid or changing growth.
• B) As firms mature, their growth slows to rates more typical of established companies.
• C) The dividend discount model values the stock based on a forecast of the future dividends paid to shareholders.
• D) The simplest forecast for the firm's future dividends states that they will grow at a constant rate, g, forever.