Ask Question
BusinessBusiness
7 June, 18:52

The dividend growth model: Multiple Choice is only as reliable as the estimated rate of growth can only be used if historical dividend information is available. applies only when a company is currently paying dividends considers the risk that future dividends may vary from their estimated values. is based solely on historical dividend information

+5
Answers (2)
  1. 7 June, 18:56
    0
    The correct answer is letter "A": is only as reliable as the estimated rate of growth.

    Explanation:

    The dividend growth model, also known as the Gordon Growth Model or GGM, is used to calculate the intrinsic value of a stock today, based on the stock's expected future dividends. The model is most effective when used for large, stable companies in mature markets that have a predictable rate of dividend growth. However, the model ignores factors that affect the market price of a stock such as new products, competition, and investor sentiment.
  2. 7 June, 19:07
    0
    Answer: The correct answer is "is only as reliable as the estimated rate of growth".

    Explanation: The dividend growth model: is only as reliable as the estimated rate of growth because the growth model is a method to assess the price of a company's stock using constant growth and discounting the value of future dividends today.

    This happens because it assumes that the growth that the company will experience is constant.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “The dividend growth model: Multiple Choice is only as reliable as the estimated rate of growth can only be used if historical dividend ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Accounts payable $35,000 Cash provided by operations $90,000 Accounts receivable 37,500 Net income 36,000 Average common shares 20,000 Salaries and wages payable 8,000 Average current liabilities 110,000 Stockholders' equity 240,000 Average and
Answers (1)
in an assembly operation at a furniture factory, six employees assembled an average of 450 custom chairs per 5-day week. What is the labor productivity of this operation?
Answers (1)
Bond J has a coupon rate of 5 percent and Bond K has a coupon rate of 11 percent. Both bonds have 14 years to maturity, make semiannual payments, and have a YTM of 8 percent. a.
Answers (1)
How is an investment bank different from a commercial bank? O A. An investment bank is a nondepository institution; a commercial bank takes customer's deposits. O B.
Answers (1)
Portman Industries just paid a dividend of $2.40 per share. The company expects the coming year to be very profitable, and its dividend is expected to grow by 12.00% over the next year.
Answers (1)
New Questions in Business
7. Debt Irrelevance. Digital Fruit is financed solely by common stock and has outstanding 25 million shares with a market price of $10 a share.
Answers (1)
Which economic system has economic roles that are passed from generation to generation?
Answers (1)
Kyle Carlson invested $10,000 in a savings account paying 12% interest compounded quarterly. Assuming that he makes no withdrawals, how much interest will he earn during the second quarter of the first year?
Answers (1)
If a manager increases the system utilization standard (assuming no change in the customer arrival rate) what happens to the average customer time in the system? A. It increases exponentially. B. It increases proportionally. C.
Answers (1)
Let a be the event that a student is enrolled in an accounting course, and let s be the event that a student is enrolled in a statistics course.
Answers (1)
Home » Business » The dividend growth model: Multiple Choice is only as reliable as the estimated rate of growth can only be used if historical dividend information is available.
Sign Up Forgot Password?