The dividend growth model: Select one: a. is only as reliable as the estimated r
ID: 2657401 • Letter: T
Question
The dividend growth model:
Select one:
a. is only as reliable as the estimated rate of growth
b. can only be used if historical dividend information is available
c. considers the risk that future dividends may vary from their estimated values.
d. applies only when a firm is currently paying dividends
e. uses beta to measure the systematic risk of a firm
A pool of people got decided to buy all of the outstanding common shares of ABC Company. What is the return that these individuals require on this investment called?
Select one:
a. dividend yield
b. cost of equity
c. capital gains yield
d. cost of capital
e. income return
Explanation / Answer
Answer for Q.No 1
The dividend growth model:
(a)is only as reliable as the estimated rate of growth
Answer for Q.No 2
A pool of people got decided to buy all of the outstanding common shares of ABC Company. What is the return that these individuals require on this investment called?
(b) cost of equity
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