Which of the Following Is a Limitation of the Dividend-Discount

question 41

Multiple Choice

Which of the following is a limitation of the dividend-discount model?

• A) It cannot handle negative growth rates.
• B) It requires accurate dividend forecasts, which is not possible.
• C) It requires that the growth rate always be higher than the required rate of return, which is not realistic.
• D) It does not consider past earnings and performance.

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Definitions:

Matrix Structure

An organizational structure that combines two or more types of departmentalization, often product and functional, giving rise to a complex grid of interdepartmental relationships.

Horizontal Structure

An organizational design that minimizes hierarchical levels, promoting a decentralized decision-making process, and encouraging collaboration across departments.

Vertical Structure

An organizational layout where each level of management reports to a higher level, creating a hierarchy of authority.

Functional Structure

An organizational design that groups employees by their specialized roles or functions, such as marketing or finance.