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Which of the following is not true? Group of answer choices The dividend growth model seeks...

Which of the following is not true? Group of answer choices

The dividend growth model seeks to estimate the current market value of a stock by calculating the total future value of the future dividend payments.

The dividend growth model cannot be used to estimate the current market value of stocks of firms that don’t issue any dividends.

There are ways other than the dividend growth model to conduct stock valuation, including multiplying a benchmark Price-to-Earnings ratio with earnings per share (EPS). The dividend growth in “x” years is calculated by subtracting the current dividend payment from the amount of dividend payment “x” years from now.

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Answer #1

The correct option is A

The Dividend growth model is used to calculate the present value of all the future dividends that the sharheolder will get not the future value and the sum of all these present value constitute the share price. So, Statement 1 is False

This Model, Can not be used for the companies that don't pay the dividends and the 3rd statement also states true that share price can be calculated by multiplying the PE ratio by Earning per share also the latter statement is true.

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