Which of the following statements is NOT true about zero-growth stocks?
A) Dividend payment pattern remains constant over time.
B) The cash flow pattern resembles a perpetuity with a constant cash flow.
C) Dividend pattern for common stock of a company shows growth over time.
D) There is no growth in dividends over time.

Question

Quizplus · Accepted Answer

Zero-growth stocks refer to companies that have reached maturity and no longer have significant growth opportunities. Therefore, their dividend payment patterns and cash flow patterns remain constant or grow at a slow pace. Option C states that the dividend pattern shows growth over time, which is not true for zero-growth stocks.

Which of the Following Statements Is NOT True About Zero-Growth