In the Gordon Model, the Value of the Common Stock

Multiple Choice

In the Gordon model, the value of the common stock is the

A) present value of a nongrowing dividend stream.
B) present value of a constant, growing dividend stream.
C) net value of all assets which are liquidated for their exact accounting value.
D) actual amount each common stockholder would expect to receive if the firm's assets are sold, creditors and preferred stockholders are repaid, and any remaining money is divided among the common stockholders.