Which One of the Following Statements Is Correct Related to the Dividend

question 30

Multiple Choice

Which one of the following statements is correct related to the dividend growth model approach to computing the cost of equity?

• A)The annual dividend used in the computation must be for year one if you are using today's stock price to compute the return.
• B)The rate of growth must exceed the required rate of return.
• C)The cost of equity is equal to the return on the stock plus the risk-free rate.
• D)The cost of equity is equal to the return on the stock multiplied by the stock's beta.
• E)The rate of return must be adjusted for taxes.

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Definitions:

VGA

Stands for Video Graphics Array, an analog standard for connecting monitors to computers, known for its 15-pin connector.

DVI-I

The most common type of DVI video connector that is used with both analog and digital monitors.

Micro-USB

A standard interface port on mobile devices and smartphones.

Mini-USB

A port found on mobile devices that is a miniaturized version of the Universal Serial Bus (USB) interface created for connecting smartphones, GPS devices, printers, and digital cameras.