A model which makes an assumption about the future growth of dividends is known as:
Correct answer: B. Dividend Growth Model
- A. Dividend Price Model
- B. Dividend Growth Model
- C. Dividend Policy Model
- D. All of the given optionsForm An LLC
Explanation
The dividend growth model values a share by making an assumption about the future growth of its dividends, commonly using a constant-growth assumption. The other terms are not the standard name for this valuation model.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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