Which of the Following Statements Is FALSE

question 20

Multiple Choice

Which of the following statements is FALSE?

• A)Successful young firms often have high initial earnings growth rates.
• B)A firm can only pay out its earnings to investors or reinvest its earnings.
• C)According to the constant dividend growth model, the value of the firm depends on the current dividend level divided by the equity cost of capital plus the grow rate.
• D)Estimating dividends, especially for the distant future, is difficult.