Which of the Following Statements Is False

question 61

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 its 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 growth rate.

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Definitions:

Surplus

An excess amount of something, especially in the context of production and supply exceeding demand in economics, leading to a situation where the quantity supplied is greater than the quantity demanded.

Nonprice Rationing

Methods of allocating goods and services without adjusting prices, often used in times of shortages, such as queuing or allocating based on need.

Queuing

The process or system by which people or items are arranged in a line awaiting their turn to be attended to or processed.

Ration Coupons

Tickets or coupons that entitle individuals to purchase a certain amount of a given product per month.