Which of the Following Statements Is FALSE

question 55

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:

Chart of Accounts

A structured list of all the accounts in a company’s general ledger, which records all financial transactions.

Journal Entry

A record in the books of accounts that represents a transaction and its effect on various accounts.

Posting References

Identifiers used in accounting to link journal entries to the corresponding ledger accounts for audit trails and record-keeping accuracy.

Transaction

An agreement or communication carried out between two or more parties that results in the exchange of value, such as the purchase or sale of goods or services.