In Comparing the Constant-Growth Model and the Capital Asset Pricing

question 49

Multiple Choice

In comparing the constant-growth model and the capital asset pricing model (CAPM) to calculate the cost of common stock equity, ________.

• A) the CAPM ignores risk, while the constant-growth model directly considers risk as reflected in the beta
• B) the CAPM directly considers risk as reflected in the beta, while the constant-growth model uses the market price as a reflection of the expected risk-return preference of investors
• C) the CAPM directly considers risk as reflected in the beta, while the constant growth model uses dividend expectations as a reflection of risk
• D) the CAPM indirectly considers risk as reflected in the market return, while the constant growth model uses dividend expectations as a reflection of risk

Recognize and interpret the significance of key parameters in counter instructions (e.g., Preset, Accum).

Describe how counter values are maintained or reset based on rung conditions.

Identify the role of external trigger signals in counter operation.

Differentiate between retentive and non-retentive counter behavior.

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