Which of the following statements is FALSE of the dividend-discountmodel Pn= Dn+1/(r-g)?a. The dividend-discount model values the stock based on aforecast of the future dividends paid to shareholders.b. The value the stock for a firm with rapid or changing growth canbe determined just with the dividend-discount model.C.The simplest forecast for the firm's future dividends states thatthey will grow at a constant rate, i.e., forever.d. As firms mature, their growth slows to rates more typical ofestablished companies.

Dividend discount model is indeed the method of valuation which tends to value the stock based on a…

Which of the following statements is FALSE of the dividend-discount model Pn= Dn+1/(r-g)? a. The dividend-discount model values the stock based on a forecast of the future dividends paid to shareholders. b. The value the stock for a firm with rapid or changing growth car be determined just with the dividend-discount model. c. The simplest forecast for the firm's future dividends states that they will grow at a constant rate, i.e., forever. d. As firms mature, their growth slows to rates more typical of established companies.

Which of the following statements is FALSE of the dividend-discount model Pn= Dn+1/(r-g)? a. The dividend-discount model values the stock based on a forecast of the future dividends paid to shareholders. b. The value the stock for a firm with rapid or changing growth car be determined just with the dividend-discount model. c. The simplest forecast for the firm's future dividends states that they will grow at a constant rate, i.e., forever. d. As firms mature, their growth slows to rates more typical of established companies.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 12QTD

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