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:

PEM

Protein-Energy Malnutrition, a condition resulting from a diet lacking in adequate calories and protein.

Marasmus

A wasted, potentially lethal body condition caused by inadequate nutrition and characterized by painful thinness.

Essential Nutrients

Vital substances required for normal body functioning that must be obtained from the diet because they are not synthesized by the body in sufficient amounts.

Myelination

The process of forming a myelin sheath around the axons of neurons, which is critical for the proper functioning of the nervous system.