Which of the statements below is FALSE? A)In estimating the current price using the constant growth dividend model,we let g be the growth rate of the dividend stream and r be the rate of return required by the potential buyer of the stock. B)Constant growth means that the percentage increase in the dividend is the same each year. C)Div₀ refers to the dividends that have just been paid to the current owner of the stock. D)One unlikely dividend pattern is to raise or grow dividends by a fixed amount at fixed intervals.

Question

Quizplus · Accepted Answer

The statement is false because it describes a pattern of dividends growing by a fixed amount at fixed intervals, which is actually a common pattern known as constant growth, not an unlikely one.

Which of the Statements Below Is FALSE