Activity 2: Q4) Which of the following statements is FALSE? A Estimating dividends, especially for the distant future, is difficult. B A firm can only pay out its earnings to investors or reinvest their earnings. C Successful young firms often have high initial earnings growth rates. As firms mature, their growth tends to slow down to a constant and stable rate. D According to the constant dividend growth model, the value of the firm depends on the current dividend level, divided by the equity cost of capital plus the growth rate. SUBMIT

Activity 2: Q5) Which of the following statements is FALSE? A We should use the general dividend discount model to value the stock of a firm with rapid or changing growth. B Preference shares usually pay a fixed dividend. Valuing the preference share with the dividend discount model is essentially applying the perpetuity formula. C The dividend discount model values the stock based on a forecast of the future dividends paid to shareholders. D The constant dividend growth model assumes that firm's future dividends grow at a constant rate, g, forever. SUBMIT

Which of the following statements is FALSE? O a. The simplest forecast for the firm's future dividends states that they will growat a constant rate; i.e., forever. O b. We must discount the cash flows from stock based on the equity cost ofcapital for the stock. O c. The firm might pay out cash to its shareholders in the form of a dividend.O d. The dividend yield is the expected annual dividend of a stock, divided by itsexpected future sale price.

Which of the following is NOT a way that a firm can increase its dividend?a.By increasing its dividend payout rateb.By increasing its retention ratec.By increasing its earnings (net income)d.None of them.e.By decreasing its shares outstanding

Select those statements below that are true about cash dividends. (Check all that apply.)Multiple select question.On the date of record, Retained Earnings is decreased.On the payment date, Retained Earnings is decreased.On the payment date, current assets are decreased.On the declaration date, liabilities are increased.

Each year, shareholders receive a dividend equal to the firm's net earnings divided by the number of shares of common stock. A. TRUE B. FALSE