Question

The dividend growth model can be used to value the stock of firms that pay which type of dividends?I. Constant annual dividendII. Annual dividend with a constant increasing rate of growthIII. Annual dividend with a constant decreasing rate of growthIV. Zero dividendPossible Answers:I onlyII onlyII and III onlyI, II, and III onlyI, II, III, and IV

Answer 1

Answer:

II and III only

Explanation:

Since the Zero dividend is not possible in most of the scenarios.

The dividend growth model can be used to value the stock of firms that pay Annual dividend with a constant increasing rate of growth and the Annual dividend with a constant decreasing rate of growth.