Which of the following are the three simplifying assumptions that cover most stock growth patterns? Dividends remain constant over time, dividends grow at a constant rate, and dividends are equal to zero. Dividends have a zero-growth rate, dividends grow at a varying rate, and dividends are equal to zero.
Full Answer
What are the three simplifying assumptions that cover most stock growth patterns?
c. They generally pay dividends during their fast growth phase. d. None of the above. B 52. The three simplifying assumptions that cover most stock growth patterns are a. dividends that stay constant over time, dividends that grow at a constant rate, and dividends that are equal to zero.
What must be true for the constant growth dividend model?
A) In order for the constant growth dividend model to properly value a firm's common stock, R must be greater than g. B) From a practical perspective, the growth rate in the constant growth dividend model must be greater than the sum of the long-term rate of inflation and the long-term real growth rate of the economy.
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What do you mean by fast growth firms?
These are firms that grow their sales at above-average rates and are expected to do so for a length of time. b. These are firms that grow their earnings at above-average rates and are expected to do so for a length of time. c. They generally pay dividends during their fast growth phase. d. None of the above. B 52.
What are the three basic patterns of dividend growth?
What are the three basic patterns of dividend growth? Constant growth, zero growth, and differential growth.
Which of the following is the most typical example of a zero growth dividend stock?
Which of the following is the most typical example of a zero-growth dividend stock? The preferred stock of a utility company. Preferred stock is sometimes treated like a debt security because: preferred dividend payments are similar to bond interest payments and are fixed in nature regardless of the firm's earnings.
What are the 3 types of dividend discount model DDM?
The different types of DDM are as follows:Zero Growth DDM. ... Constant Growth Rate DDM. ... Variable Growth DDM or Non-Constant Growth. ... Two Stage DDM. ... Three Stage DDM.
What is the zero growth model?
The zero-growth model assumes that the dividend always stays the same, i.e., there is no growth in dividends. Therefore, the stock price would be equal to the annual dividends divided by the required rate of return. It is the same formula used to calculate the present value of perpetuity.
Which simplifying assumptions cover most stock growth patterns?
The three simplifying assumptions that cover most stock growth patterns are. a. dividends that stay constant over time, dividends that grow at a constant rate, and dividends that are equal to zero . b. dividends that have a zero-growth rate, dividends that grow at a varying rate, and dividends that are equal to zero.
Which stock market is the most efficient?
b. The NASDAQ is the most efficient stockmarket in the United States.
What is the best known example of a dealer market?
a. NYSE is the best-known example of a dealer market.
What is the term for brokers who bring buyers and sellers together to earn a fee?
a. Brokers bring buyers and sellers together to earn a fee, called a commission.
What is secondary market?
a. In secondary markets, outstanding shares of stock are bought and sold among investors.
Which is bigger, the NASDAQ or the NYSE?
b. In terms of the number of companies listed and shares traded on a daily basis, the NASDAQ is larger than the NYSE.
Where are secondary market transactions done?
d. In the United States, most secondary market transactions are done on one of the many stock exchanges.