Question

Which of the following is false?
A. For a constant dividend growth stock, the stock price is expected to grow at a rate equal to the dividend growth rate.
B. For the constant dividend growth model, the required return must be larger than the constant dividend growth rate.
C. As with bonds, the current price of a stock is the future value of all expected cash flows.
D. Financial managers attempt to maximize the value of the firm by increasing the growth rate.

E. All of the above.
F. None of the above.

Answer 1

Which of the following is false?
A. For a constant dividend growth stock, the stock price is expected to grow at a rate equal to the dividend growth rate.	TRUE
B. For the constant dividend growth model, the required return must be larger than the constant dividend growth rate.	TRUE
C. As with bonds, the current price of a stock is the future value of all expected cash flows.	FALSE	As with bonds, the current price of a stock is the  Present  value of all expected cash flows
D. Financial managers attempt to maximize the value of the firm by increasing the growth rate.	TRUE
E. All of the above.
F. None of the above.
Option C is the correct Option