Which of the following statements is FALSE?
A)Estimating dividends,especially for the distant future,is difficult.
B)A firm can only pay out its earnings to investors or reinvest their earnings.
C)Successful young firms often have high initial earnings growth rates.
D)According to the constant dividend growth model,the value of the firm depends on the current dividend level,divided by the equity cost of capital plus the growth rate.

Question

Quizplus · Accepted Answer

The statement in option D is false. According to the constant dividend growth model, the value of the firm depends on the current dividend level multiplied by the growth rate, divided by the equity cost of capital minus the growth rate.

Which of the Following Statements Is FALSE