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:

Individual Parts

Components or pieces that when combined form a whole system or object.

Physiological Psychology

A branch of psychology that studies the relationship between behavior and the physical processes of the brain and other parts of the nervous system.

University of Leipzig

The University of Leipzig is a renowned research university located in Leipzig, Germany, established in 1409, making it one of the world's oldest universities.

Wilhelm Wundt

A German psychologist widely considered the father of experimental psychology, who established the first psychological laboratory.