Assuming g will stay constant, the dividend yield is a good measure of the required return on a common stock under which of the following circumstances?
A) g = 0
B) g > 0
C) g < 0
D) Never
A
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One study of adult involvement in household tasks revealed greater similarities between the United Kingdom and the United States compared with France, Belgium, and French Canada. Thus, the United States and United Kingdom were "twins" based on common language. This study is an example of:
A) market latency. B) conjoint analysis. C) factor analysis. D) multidimensional scaling. E) cluster analysis.
Answer the following statements true (T) or false (F)
The continental model of financial reporting generally reflects a strong governmental influence on accounting regulation.
Salvage value is an estimate of an asset's value at the end of its useful life.
Answer the following statement true (T) or false (F)
A stock is expected to pay a year-end dividend of $2.00, i.e., D1 = $2.00. The dividend is expected to decline at a rate of 5% a year forever (g = -5%). If the company is in equilibrium and its expected and required rate of return is 15%, then which of the following statements is CORRECT?
A. The company's current stock price is $20. B. The company's dividend yield 5 years from now is expected to be 10%. C. The constant growth model cannot be used because the growth rate is negative. D. The company's expected capital gains yield is 5%. E. The company's expected stock price at the beginning of next year is $9.50.