Which of the Following Statements Is FALSE

question 39

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,i.e. ,forever.

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Definitions:

Distribute

To distribute means to give out or spread something widely among a number of recipients.

Artificial Entities

Organizations created by law, such as corporations or partnerships, that have legal rights and obligations separate from those of their members.

Morally Accountable

Being responsible or answerable for one's actions from an ethical or moral standpoint.

Corporations

Legal entities recognized by law as separate from their owners, with the ability to own property, enter contracts, and be sued.