Which of the following statements concerning the constant-growth dividend valuation model is (are) correct?
I. One simple method of estimating the dividend growth rate is to analyze the historical pattern of dividends.
II. The expected total return equals the return from capital gains plus the return from dividends paid.
III. 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 payoffs differ.
A) I and IV only
B) II and III only
C) I, II and IV only
D) I, II and III only
Answer: C
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Indicate whether the statement is true or false
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Brummer Corporation makes a product whose variable overhead standards are based on direct labor-hours. The quantity standard is 0.1 hours per unit. The variable overhead rate standard is $8.00 per hour. In January the company produced 8,700 units using 910 direct labor-hours. The actual variable overhead rate was $7.90 per hour.The variable overhead efficiency variance for January is:
A. $316 U B. $320 F C. $320 U D. $316 F