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The Constant Growth Rate Model of the DDM Implies That

Question 43

Multiple Choice

The constant growth rate model of the DDM implies that:


A) earnings are not relevant to stock prices.
B) the payout ratio remains fixed.
C) the stock price grows at the same rate as dividends.
D) the growth rate in dividends equates to zero (i.e.,dividends remain a "constant" dollar amount over time) .

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