When Using the Constant-Growth Dividend Valuation Model, Which of the Following

question 75

Multiple Choice

When using the constant-growth dividend valuation model, which of the following will lower the value of the stock?

• A) an increase in the required rate of return
• B) a decrease in the required rate of return
• C) an increase in the dividend payout ratio
• D) an increase in the growth rate of the dividends

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Definitions:

Darley and Latané

Psychologists known for research on bystander intervention and the diffusion of responsibility in emergency situations.

Marginalization

The process by which certain groups are pushed to the edge of society by not allowing them an active voice, identity, or place in it.

Consummate Love

A term from Sternberg's Triangular Theory of Love that signifies an ideal form of love incorporating intimacy, passion, and commitment.

Sternberg

Sternberg refers to Robert Sternberg, an influential psychologist known for his theories on intelligence, creativity, love, and wisdom.