The underlying assumption of the dividend growth model is that a stock is worth:

2. Assume you are making use of the dividend development design to worth
shares. In the event that you anticipate industry price of come back to boost across
the board on all equity securities, then you definitely should anticipate
the:
A. marketplace values of all of the shares to boost, everything else
continual.
B. marketplace values of all of the shares to keep continual since the dividend
development will counterbalance the boost in industry price.
C. marketplace values of all of the shares to diminish, everything else
continual.
D. shares which do not spend dividends to diminish in expense although the
dividend-paying shares preserve a continuing cost.
E. dividend development prices to boost to counterbalance this modification. 3. the full total price of return obtained on a stock is made up of which
two of this after?
I. present yield
II. yield to readiness
III. dividend yield
IV. money gains yield
A. We and II just
B. We and IV just
C. II and III just
D. II and IV just
E. III and IV just 4. the worth of typical stock these days depends upon:
A. the anticipated future keeping duration together with rebate price.
B. the anticipated future dividends together with money gains.
C. the anticipated future dividends, money gains together with rebate
price.
D. the anticipated future keeping duration and money gains.
E. nothing of this overhead.

1. The underlying assumption of the dividend growth model is that a
stock is worth:
A. the same amount to every investor regardless of their desired
rate of return.
B. the present value of the future income which the stock
generates.
C. an amount computed as the next annual dividend divided by the
market rate of return.
D. the same amount as any other stock that pays the same current
dividend and has the same required rate of return.
E. an amount computed as the next annual dividend divided by the
required rate of return.
2. Assume that you are using the dividend growth model to value
stocks. If you expect the market rate of return to increase across
the board on all equity securities, then you should also expect
the:
A. market values of all stocks to increase, all else
constant.
B. market values of all stocks to remain constant as the dividend
growth will offset the increase in the market rate.
C. market values of all stocks to decrease, all else
constant.
D. stocks that do not pay dividends to decrease in price while the
dividend-paying stocks maintain a constant price.
E. dividend growth rates to increase to offset this change.
3. The total rate of return earned on a stock is comprised of which
two of the following?
I. current yield
II. yield to maturity
III. dividend yield
IV. capital gains yield
A. I and II only
B. I and IV only
C. II and III only
D. II and IV only
E. III and IV only
4. The value of common stock today depends on:
A. the expected future holding period and the discount rate.
B. the expected future dividends and the capital gains.
C. the expected future dividends, capital gains and the discount
rate.
D. the expected future holding period and capital gains.
E. None of the above.

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