Which of the following statements is CORRECT?
A) two firms with the same expected dividend and growth rates must also have the same stock price.
B) it is appropriate to use the constant growth model to estimate a stock's value even if its growth rate is never expected to become constant.
C) if a stock has a required rate of return rs = 12%, and if its dividend is expected to grow at a constant rate of 5%, this implies that the stock's dividend yield is also 5%.
D) the price of a stock is the present value of all expected future dividends, discounted at the dividend growth rate.
E) the constant growth model takes into consideration the capital gains investors expect to earn on a stock.
Correct Answer:
Verified
Q31: Based on the free cash flow valuation
Q33: Huxley Building Supplies' last free cash flow
Q35: Free cash flows should be discounted at
Q40: The free cash flows (in millions)
Q41: A stock is expected to pay a
Q43: If a firm's expected growth rate increased
Q44: Stocks A and B have the
Q46: Stocks A and B have the
Q47: Which of the following statements is CORRECT,
Q51: You, in analyzing a stock, find that
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents