Author Question: When using the constant-growth dividend valuation model, which of the following will lower the value ... (Read 60 times)

byomi · **on:** Mar 29, 2022

Question 1

What is the required rate of return on a common stock that is expected to pay a $0.75 annual dividend next year if dividends are expected to grow at 2 percent annually and the current stock price is $8.59?
◦ 8.73%
◦ 8.91%
◦ 10.73%
◦ 11.38%

Question 2

When using the constant-growth dividend valuation model, which of the following will lower the value of the stock?
◦ an increase in the required rate of return
◦ a decrease in the required rate of return
◦ an increase in the dividend payout ratio
◦ an increase in the growth rate of the dividends

kalimarie · **Reply #1 on:** Mar 29, 2022

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