Which one of the following statements is NOT true about the general dividend valuation model?
A) The model does not assume any specific pattern for dividend growth.
B) It makes a specific assumption about when the share is going to be sold in the future.
C) The model calls for forecasting an infinite number of dividends for a share.
D) All of the above are true.

Question

Quizplus · Accepted Answer

The general dividend valuation model does not make any specific assumption about when the share is going to be sold in the future. It only requires forecasting future dividends and calculating the present value of those dividends. The other statements are true. The model does not assume any specific pattern for dividend growth, and it calls for forecasting an infinite number of dividends for a share (assuming the share is held indefinitely).

Which One of the Following Statements Is NOT True About