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masha68 [24]
3 years ago
14

Which of the following statements is true about the constant growth model?

Business
1 answer:
Eduardwww [97]3 years ago
7 0

Answer: The constant growth model can be used if a stock's expected constant growth rate is less than its required return.

Explanation:

The Constant Growth Model  is a stock valuation method.

It assumes that a company's dividends are increasing at a constant growth rate indefinitely.

Formula: Current price =  (Next dividend the company is to pay) ÷ (required rate of return for the company - expected growth rate in the dividend.

When expected constant < required return, then the constant growth model can be used.

Hence, the statement is true about the constant growth model :

The constant growth model can be used if a stock's expected constant growth rate is less than its required return.

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Answer:

Explanation:

as the discount rate gets larger, the price of the bond will decrease. as the coupon rate increases, the bond price will increase. bond prices are calculated by taking the present value of the coupons and face value of bonds. If the coupons are larger, the present value of the coupons will also be larger.

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3 years ago
A monopoly that attempts to charge the socially desirable price will invariably reduce their economic profit because:_______
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D

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Pharoah Inc. purchased land, building, and equipment from Laguna Corporation for a cash payment of $390,600. The estimated fair
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Answer:

Land = 65100.001

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Equipment = $99,200/$446400 * $390,600

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