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 that one unlikely dividend pattern is to raise or grow dividends by a fixed amount at fixed intervals is false. This is because in practice, companies rarely follow such a predictable dividend pattern. Instead, dividend payouts may vary depending on a variety of factors such as company performance, cash flow, and financial obligations.

Which of the Statements Below Is FALSE