Exam 4: The Value of Common Stocks

The only payoff to the owners of common stocks is in the form of cash dividends.

The constant growth formula for stock valuation does not work for a firm with a negative growth rate (i.e., a declining growth rate) in its dividend.

The following are auction markets except the

One can use the discounted cash flow formulas that are used to value common stocks in order to value entire businesses.

All securities in an equivalent risk class are priced to offer the same expected return.

In which of the following exchanges does a computer act as the sole auctioneer?