Which of the Following Features Are Advantages of the Dividend

question 28

Multiple Choice

Which of the following features are advantages of the dividend growth model?
I.easy to understand
II.model simplicity
III.constant dividend growth rate
IV.model's applicability to all common stocks

• A)I and II only
• B)I,II and III only
• C)II only
• D)II and IV only
• E)I and III only

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Definitions:

Cumulative Dividends

Dividends that are owed and accumulate if not paid in a given period, typically associated with preferred shares.

Common Stock

A type of security that represents ownership in a corporation, with holders having a claim on the company's assets and earnings.

Preemptive Right

The right of existing shareholders to purchase additional shares before the company offers them to the public, maintaining their proportional ownership.

Common Shareholder

A common shareholder is an individual or institution that owns common shares in a company, giving them rights to vote at shareholder meetings and to receive dividends.