Author Question: If we assume that a company will be in business forever and that it continues to pay dividends ... (Read 111 times)

ssal · **on:** Jul 10, 2018

If we assume that a company will be in business forever and that it continues to pay dividends during its existence, then we have an annuity dividend stream.

Indicate whether the statement is true or false.

Question 2

The dividend stream we would have legal claim to is for only that period of the company's life during which we own the stock or until the company goes out of business and stops paying dividends

Indicate whether the statement is true or false.

BUTTHOL369 · **Reply #1 on:** Jul 10, 2018

Answer to Question 1

Answer: FALSE
Explanation: If we assume that the company will be in business forever, then we have a PERPETUAL dividend stream.

Answer to Question 2

Answer: TRUE