Which of the Following Statements Is FALSE

question 16

Multiple Choice

Which of the following statements is FALSE?

• A)We cannot use the general dividend-discount model to value the stock of a firm with rapid or changing growth.
• B)The dividend-discount model values the stock based on a forecast of the future dividends paid to shareholders.
• C)As firms mature, their growth slows to rates more typical of established companies.
• D)The simplest forecast for the firm's future dividends states that they will grow at a constant rate; i.e. forever.

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Definitions:

Personal Benefit

An advantage or gain received by an individual, often as a result of employment, investment, or personal connections.

Contributions

Gifts or payments made to support an organization, cause, or initiative, typically in the form of money, services, or goods.

Theory X

Theory X is a management concept that assumes employees are inherently lazy and will avoid work if they can, suggesting the need for strict supervision and control.

Workers

Individuals engaged in an occupation, profession, or are employed by an organization.