The common stock of a constant-growth firm is valued in the same manner as its preferred stock.

Name: The common stock of a constant-growth firm is valued in the same manner as its preferred stock.
Brand: Quizplus
Rating: 4.7 (51 reviews)

Question

Quizplus · Accepted Answer

The common stock of a constant-growth firm is valued using the dividend discount model, while the preferred stock is valued using the constant dividend model. They are valued differently, therefore the statement is false.

The Common Stock of a Constant-Growth Firm Is Valued in the Same