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Author Question: The constant growth model is an approach to dividend valuation that assumes that dividends grow at a ... (Read 55 times)

Lisaclaire

  • Hero Member
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  • Posts: 569
on: Jul 10, 2018
The constant growth model is an approach to dividend valuation that assumes that dividends grow at a constant rate indefinitely.
 
  Indicate whether the statement is true or false

Question 2

Little, Inc. paid a 20 percent stock dividend. Prior to the dividend, the stock's price was 50 a share. Immediately after the dividend, the price will
 
  A)
 
  increase to 60.00 a share.
  B)
 
  decrease to 40.00 a share.
  C)
 
  decrease to 41.67 a share.
  D)
 
  do nothing in particular because of the dividend.


frejo

  • Sr. Member
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  • Posts: 349
Reply #1 on: Jul 10, 2018
Answer to Question 1

TRUE

Answer to Question 2

C


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