Which of the Following Statements Is FALSE of the Dividend-Discount

question 16

Multiple Choice

Which of the following statements is FALSE of the dividend-discount model?

• A) We cannot use the dividend-discount model to value the stock of a firm with rapid or changing growth.
• B) As firms mature, their growth slows to rates more typical of established companies.
• C) The dividend-discount model values the stock based on a forecast of the future dividends paid to shareholders.
• D) The simplest forecast for the firm's future dividends states that they will grow at a constant rate, i.e., forever.

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Definitions:

Suggestive Proposition

A proposition that implies that the prospect should act now.

Textbook Salesperson

A sales professional who strictly follows the conventional rules and strategies of selling as outlined in sales literature or training.

Sales Presentation

A formal talk or demonstration designed to showcase a product's benefits to potential buyers, aiming to encourage a purchase.

Sales Presentation Mix

The key communication elements used by the salesperson in the presentation.