Question

If a company called Advanced Technologies has yet to pay a dividend on its​ stock, the...

If a company called Advanced Technologies has yet to pay a dividend on its​ stock, the generalized dividend model predicts that the​ company's stock may still have value because

A. all companies are legally required to pay dividends within ten years of the initial public offering of stock.

B. all companies that have any physical assets have value.

C. people expect Advanced Technologies to pay dividends in the future.

D. the required return on investment for high technology companies is zero.

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Answer #1

Ans C. people expect Advanced Technologies to pay dividends in the future.

If a company called Advanced Technologies has yet to pay a dividend on its​ stock, the generalized dividend model predicts that the​ company's stock may still have value because people expect Advanced Technologies to pay dividends in the future.

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