For the Zero Growth Model

question 61

Multiple Choice

For the zero growth model:

• A) because the valuation formula reduces to the equation for the present value of a perpetuity the process is essentially the same for valuing preferred stock.
• B) because the valuation formula reduces to the equation for the future value of a perpetuity the process is essentially the same for valuing preferred stock
• C) because the valuation formula reduces to the equation for the present value of an ordinary annuity,the process is essentially the same for valuing preferred stock.
• D) because the valuation formula reduces to the equation for the future value of an ordinary annuity,the process is essentially the same for valuing preferred stock.

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Definitions:

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