In the Gordon Model, the Value of the Common Stock

question 174

Multiple Choice

In the Gordon model, the value of the common stock is the

• A) net value of all assets which are liquidated for their exact accounting value.
• B) actual amount each common stockholder would expect to receive if the firm's assets are sold, creditors and preferred stockholders are repaid, and any remaining money is divided among the common stockholders.
• C) present value of a non-growing dividend stream.
• D) present value of a constant, growing dividend stream.

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