Solved

Which of the Following Statements Is CORRECT

Question 35

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 a stock's value even if its growth rate is never expected to become constant.
D) If a stock has a required rate of return rs = 12%,and if its dividend is expected to grow at a constant rate of 5%,then the stock's dividend yield is also 5%.
E) The price of a stock is the present value of all expected future dividends,discounted at the dividend growth rate.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents