If the model below is to give a reasonable valuation of a stock, ...

[sam.t96]

If the model below is to give a reasonable valuation of a stock, which of the following is NOT a valid assumption of the model?
  Po = Do(1 + g) / (Ke - g)
 
  A) Growth, g, is negative.
  B) There will be no growth.
  C) The growth rate exceeds the required rate of return.
  D) The required return is exceptionally high (Ks > 30).

Question 2

Common stock is a vehicle for selling ownership and another way to raise money for operations, expansion, or other business needs.
 
  Indicate whether the statement is true or false.

[livaneabi]

Answer to Question 1

C

Answer to Question 2

Answer: TRUE

[sam.t96]

Correct answers!

[livaneabi]

Great! Please up vote