Which of the following is are true I The dividend growth model only holds if at

Which of the following is are true i the dividend

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28. Which of the following is (are) true? I. The dividend growth model only holds if, at some point in time, the dividend growth rate exceeds the stock's required return. II. A decrease in the dividend growth rate will increase a stock's market value, all else the same. III. An increase in the required return on a stock will decrease its market value, all else the same. Difficulty: Basic Learning Objective: 08-01 How stock prices depend on future dividends and dividend growth. Type: Concepts 29. You are attempting to value a stock in an industry where firms are generating exceptional dividend growth, but this growth is expected to slow to an equilibrium growth rate in about five years. Of the stock valuation models studied, the most appropriate is the _______________. Difficulty: Basic Learning Objective: 08-01 How stock prices depend on future dividends and dividend growth. Type: Concepts 30. As illustrated using the dividend growth model, the total return on a share of common stock is comprised of a ________________. Difficulty: Basic Learning Objective: 08-01 How stock prices depend on future dividends and dividend growth. Type: Concepts
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31. Which of the following is (are) true? I. The dividend yield on a stock is the annual dividend divided by the par value. II. When the constant dividend growth model holds, g = capital gains yield. III. The total return on a share of stock = dividend yield + capital gains yield. Difficulty: Basic Learning Objective: 08-01 How stock prices depend on future dividends and dividend growth. Type: Concepts 32. Given no change in required returns, the price of a stock whose dividend is constant will: Difficulty: Basic Learning Objective: 08-01 How stock prices depend on future dividends and dividend growth. Type: Concepts
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  • Fall '13
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  • Dividend, Dividend yield

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