Which of the Following Statements Is Correct

question 45

Multiple Choice

Which of the following statements is correct?

• A)The constant growth model takes into consideration the capital gains investors expect to earn on a stock.
• B)Two firms with the same expected dividend and growth rate must also have the same stock price.
• C)It is appropriate to use the constant growth model to estimate stock value even if the growth rate is never expected to become constant.
• D)The price of a stock is the present value of all expected future dividends, discounted at the dividend growth rate.

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Definitions:

Prevention

Actions or measures taken to stop something undesirable, such as disease or accidents, from happening.

Diseases

Medical conditions characterized by abnormal functioning of the body or mind, leading to symptoms, distress, or impairment.

Lead Role

The central or primary character in a play, film, or other performance, typically driving the story's action.

Sore Throat

A common physical condition often characterized by pain, itchiness, or irritation of the throat.