Which of the Following Statements Is CORRECT

question 86

Multiple Choice

Which of the following statements is CORRECT?

• A) two firms with the same expected dividend and growth rates must also have the same stock price.
• B) it is appropriate to use the constant growth model to estimate a stock's value even if its growth rate is never expected to become constant.
• C) if a stock has a required rate of return rs = 12%, and if its dividend is expected to grow at a constant rate of 5%, this implies that the stock's dividend yield is also 5%.
• D) the price of a stock is the present value of all expected future dividends, discounted at the dividend growth rate.
• E) the constant growth model takes into consideration the capital gains investors expect to earn on a stock.

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Definitions:

Lifespan Views

Perspectives or theories concerning the developmental stages, challenges, and growth opportunities that occur throughout a person's life.

Development

The process of growth and change in a person or organism over time, which can be physical, cognitive, or socioemotional.

Freud's

Pertaining to Sigmund Freud, the Austrian neurologist who founded psychoanalysis, particularly his theories on the unconscious mind, defense mechanisms, and psychosexual development.

Erikson's

Pertains to the theories and concepts developed by Erik Erikson, especially those related to human psychosocial development and its eight distinct stages.