The dividend model requires that a firm has a cash dividend ...

[wenmo]

The dividend model requires that a firm has a cash dividend history and that the dividend history shows a ________.
 
  A) constant dividend or a constant growth in price where constant growth can be either positive or negative
  B) positive dividend or a negative growth in dividends
  C) constant dividend or a positive growth in dividends
  D) constant price or a positive growth in dividends

Question 2

Dividend models suggest that the value of a financial asset is determined by future cash flows. A problem arises, however, in that future cash flows may be difficult to predict as to ________ of these cash flows.
 
  A) both the timing and the amount
  B) the timing but not the amount
  C) the amount but not the timing
  D) neither the timing nor the amount

[okolip]

Answer to Question 1

Answer: C
Explanation: C) The dividend model requires that a firm has a cash dividend history and that the dividend history shows a constant dividend or a positive growth in dividends. The requirements of a constant dividend and positive growth are essential in deriving the Dividend Growth Model.

Answer to Question 2

Answer: A