The three simplifying assumptions that cover most dividend growth patterns areGroup of answer choicesdividends that have a zero-growth rate, dividends that grow at a varying rate, and dividends that are equal to zero.dividends that are equal to zero, dividends that grow at a constant rate, and dividends that have a mixed growth pattern.dividends that stay constant over time, dividends that grow at a constant rate, and dividends that are equal to zero.dividends that stay constant over time, dividends that grow at a constant rate, and dividends that have a mixed growth pattern.

Which one of the following statements is False:Group of answer choicesAn empirical study from Lintner (1956) finds that managers and investors seem more concerned with dividend changes than with dividend levels.In Australia, the majority of companies that distribute dividends do so on a quarterly basis.The Miller and Modigliani (1961) dividend irrelevance proposition assumes no cost of issuing shares.The way a firm chooses between paying dividends and retaining earnings is referred to as its payout policy.

Factors determining dividend policy include:a.Profitability and liquidity of the companyb.Stock price and market conditionsc.Taxation laws and regulatory requirementsd.All of the above

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.

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