Which One of the Following Statements Is NOT True About

question 68

Multiple Choice

Which one of the following statements is NOT true about constant-growth stocks?

• A) Dividend stays constant over time.
• B) Mature companies with a history of stable growth show this pattern.
• C) Dividends grow at a constant rate each period forever.
• D) Dividends that are to be paid out in the distant future have a very small present value and add little to the stock's price.

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Definitions:

Wins to Losses

A ratio comparing the number of wins to the number of losses, often used in sports or other competitive situations to measure performance.

Maintain Ratio

The requirement to keep a consistent ratio, often used in the context of financial ratios by firms to ensure stability or compliance with regulations.

Solve for X

The process of determining the value of the variable X that satisfies a given equation.

Proportion

A proportion is a mathematical relationship showing that two ratios or fractions are equal.