Which of the Following Statements Is FALSE

question 82

Multiple Choice

Which of the following statements is FALSE?

• A)We should 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,g,forever.

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Definitions:

Tax Accounting

A system of accounting methods and principles focused on taxes rather than the appearance of public financial statements, governing how a company reports its income and expenses for tax purposes.

Consolidated Income Tax Return

A consolidated income tax return is filed by a corporate group that combines the tax liabilities and incomes of all the entities within the group, allowing them to file as a single entity.

Intra-entity Transfers

Transactions of goods, services, or resources between divisions, departments, or affiliates within the same legal entity.

Voting Stock

Shares that give the holder the right to vote on company matters, such as electing the board of directors or other corporate policies.