Assuming G Will Stay Constant,the Dividend Yield Is a Good

question 68

Multiple Choice

Assuming g will stay constant,the dividend yield is a good measure of the required return on a common stock under which of the following circumstances?

• A) g = 0
• B) g > 0
• C) g < 0
• D) Never

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Definitions:

Accounting Functions

The systematic process of recording, analyzing, summarizing, and reporting the financial transactions of a business.

Collateral

Assets pledged by a borrower to secure a loan or other credit, ensuring the lender can seize these assets if the borrower fails to repay.

C-Corporation

A C-Corporation is a business structure where the owners or shareholders are taxed separately from the entity, which is recognized as a legal entity under U.S. law.

Double Taxation

The imposition of taxes on the same income, asset, or financial transaction at two different levels, such as corporate earnings and shareholder dividends.