Which of the Following Is an Accurate Algebraic Expression of the Dividend

question 19

Multiple Choice

Which of the following is an accurate algebraic expression of the dividend discount model? (S₀ is the share price,div₁ is the next year's forecasted dividend per share,r is the discount rate,and g is the dividend growth rate.)

• A)S₀ =div₁ \(\div\) (1 - r - g)
• B)S₀ =div₁ \(\div\) (r - g)
• C)S₀ =div₁ \(\div\) (1 - r + g)
• D)S₀ =div₁ \(\div\) (g - r)

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