Which of the following is not true? Group of answer choices The dividend growth model seeks...
Which of the following is not true? Group of answer choices
The dividend growth model seeks to estimate the current market value of a stock by calculating the total future value of the future dividend payments.
The dividend growth model cannot be used to estimate the current market value of stocks of firms that don’t issue any dividends.
There are ways other than the dividend growth model to conduct stock valuation, including multiplying a benchmark Price-to-Earnings ratio with earnings per share (EPS).
The dividend growth in “x” years is calculated by subtracting the current dividend payment from the amount of dividend payment “x” years from now.
Homework Answers
First statement is false
dividend discount model seeks to calculate the value of stock by calculating the present value of future dividend payments and not future Value of them.
The rest of statement are true.
I hope this helps you
Please press the like button
Took real efforts
Thanks
Add Answer to:
Which of the following is not true? Group of answer choices
The dividend growth model seeks...
1. According to the constant dividend growth model, which of the following is true A. the...
1. According to the constant dividend growth model, which of the following is true A. the dividend yield is the same as the capital gains yield. B. the constant growth rate is the same as the dividend yield. C. the capital gains yields is the same as the constant dividend growth rate. D. The price growth rate is the same as the dividend yield. 2. Which of the following is true about stock returns? A. the dividend yield must always...
When would it be important to AVOID using the Gordon growth model (also called the dividend...
When would it be important to AVOID using the Gordon growth model (also called the dividend discount model) to estimate the value of common stock in a future period? The required return on the stock is 5 percent and the expected dividend growth rate is 6 percent. There is an expectation that the dividend growth rate will continue indefinitely. The only reliable information available is the current dividend paid, the expected dividend growth rate, and the required return on common...
Which of the following statements is true about the general dividend valuation model? It implies that...
Which of the following statements is true about the general dividend valuation model? It implies that the value of a firm’s common stock can be determined only if the expected future dividends are infinite. The model cannot be used to calculate the value of a common stock unless the dividends exceed the firm’s expected growth rate. It implies that the underlying value of a share of stock is determined by the market’s expectations of the future dividends that the firm...
The dividend growth model: I. cannot be used to value zero-growth stocks. II. cannot be used to compute a stock pri...
The dividend growth model: I. cannot be used to value zero-growth stocks. II. cannot be used to compute a stock price at any point in time. III. requires the required return to be higher than the growth rate. IV. assumes that dividends increase by a constant amount forever. V. none of the above is correct Multiple Choice 0 II, and IV only 0 V only 0 1, I, II, and IV only 0 Ill only 0 In order to estimate...
Mandy Herr -- an investment analyst at Crimson Investment Management (CIM) -- is currently following technology...
Mandy Herr -- an investment analyst at Crimson Investment Management (CIM) -- is currently following technology stocks. Herr works with her supervisor, Jeremy Sparks -- a portfolio manager for institutional investors -- to determine appropriate investments for their clients. Herr is tracking the stock of Crown Technologies (CT), a well-known competitor in the industry. She has compiled the following information about the stock. While gathering information about Crown Technologies, Herr figured out that the company experienced a significant shift from...
Based on yahoo financial website for 3M, Part A-Fundamental Valuation: a. Estimate a growth rate for...
Based on yahoo financial website for 3M,
Part A-Fundamental Valuation: a. Estimate a growth rate for your firm's Dividends per Share. b. Assume a 12.5% discount rate. c. Calculate an estimated value of a share of the stock using the constant-growth model Ea. 8 - in the textbook), also known as the Gordon growth model. d. Compare and contrast your valuation results with the current share price in the market. e. Respond to this question: What changes in the variables...
Which of the following is not correct regarding the constant growth dividend discount model? Group of...
Which of the following is not correct regarding the constant growth dividend discount model? Group of answer choices The model is based on the dividend one year from the valuation period. The model requires that the required return be greater than or equal to the growth rate of the dividend. The model can be rearranged to determine the payout ratio. All of the above are true.
Chapter 7 - Master it! In practice, the use of the dividend discount model is refined...
Chapter 7 - Master it! In practice, the use of the dividend discount model is refined from the method we presented in the textbook. Many analysts will estimate the dividend for the next 5 years and then estimate a perpetual growth rate at some point in the future, typically 10 years. Rather than have the dividend growth fall dramatically from the fast growth period to the perpetual growth period, linear interpolation is applied. That is, the dividend growth is projected...
6) Which of the following statements concerning the constant-growth dividend valuation model is (ar) correct 1....
6) Which of the following statements concerning the constant-growth dividend valuation model is (ar) correct 1. One simple method of estimating the dividend growth rate is to analyze the historical paltem of dividends II. The expected total return equals the return from capital gains plus the return from dividends TIL. The model is applicable to growth firms with initially high growth rates. IV. The intrinsic value calculated using this method can change from one investor to another if their risk-return...
Which of the following is not a component of the Gordon (or constant dividend growth rate)...
Which of the following is not a component of the Gordon (or
constant dividend growth rate) model for valuing stocks?
next year’s expected dividend
a constant dividend growth rate
next year’s expected earnings
a discount rate that reflects the riskiness of the stock
1. According to the constant dividend growth model, which of the following is true A. the dividend yield is the same as the capital gains yield. B. the constant growth rate is the same as the dividend yield. C. the capital gains yields is the same as the constant dividend growth rate. D. The price growth rate is the same as the dividend yield. 2. Which of the following is true about stock returns? A. the dividend yield must always...
The dividend growth model: I. cannot be used to value zero-growth stocks. II. cannot be used to compute a stock price at any point in time. III. requires the required return to be higher than the growth rate. IV. assumes that dividends increase by a constant amount forever. V. none of the above is correct Multiple Choice 0 II, and IV only 0 V only 0 1, I, II, and IV only 0 Ill only 0 In order to estimate...
Based on yahoo financial website for 3M,
Part A-Fundamental Valuation: a. Estimate a growth rate for your firm's Dividends per Share. b. Assume a 12.5% discount rate. c. Calculate an estimated value of a share of the stock using the constant-growth model Ea. 8 - in the textbook), also known as the Gordon growth model. d. Compare and contrast your valuation results with the current share price in the market. e. Respond to this question: What changes in the variables...
Chapter 7 - Master it! In practice, the use of the dividend discount model is refined from the method we presented in the textbook. Many analysts will estimate the dividend for the next 5 years and then estimate a perpetual growth rate at some point in the future, typically 10 years. Rather than have the dividend growth fall dramatically from the fast growth period to the perpetual growth period, linear interpolation is applied. That is, the dividend growth is projected...
6) Which of the following statements concerning the constant-growth dividend valuation model is (ar) correct 1. One simple method of estimating the dividend growth rate is to analyze the historical paltem of dividends II. The expected total return equals the return from capital gains plus the return from dividends TIL. The model is applicable to growth firms with initially high growth rates. IV. The intrinsic value calculated using this method can change from one investor to another if their risk-return...
Which of the following is not a component of the Gordon (or
constant dividend growth rate) model for valuing stocks?
next year’s expected dividend
a constant dividend growth rate
next year’s expected earnings
a discount rate that reflects the riskiness of the stock
Most questions answered within 3 hours.
-
Write a program to solve the Josephus problem, with the following
modification:
Sample Input:
./a.out n...
asked 26 minutes ago -
At the start of a CD it is spinning at a rate of 525 rpm
(revolutions...
asked 1 hour ago -
4. Without doing any calculations, predict whether the observed
∆T would increase, decrease or remain the...
asked 2 hours ago -
Based on the range, which of the following sets of scores has
the greatest variability? 3,...
asked 3 hours ago -
Ripples in a pond travel at a velocity of 3 m/s with one peak
passing a...
asked 3 hours ago -
A man stands on the roof of a building of height 13.0 mm and
throws a...
asked 3 hours ago -
The extent to which assets are financed by borrowed funds and
other liabilities is indicated by:...
asked 4 hours ago -
Explain in detail
Germany is the fifth largest economy
explain what goods and services Germany specializes...
asked 4 hours ago -
The density of platinum is 21.45 g/mL. If a cube of platinum
with a mass of...
asked 4 hours ago -
Accounts Receivable
Sales
A/R Posting
Extended Sales Invoice
Packing Slip
Compare invoice to packing slip 2...
asked 4 hours ago -
Michaella, age 23, is a full-time law student and is claimed by
her parents as a...
asked 4 hours ago -
Why are polymers not typically casted into products?
asked 5 hours ago