(1) Given no change in required returns, the price of a stock whose dividend is constant will:

A. Increase over time at a rate of r%.

B. Decrease over time at a rate of r%.

C. Increase over time at a rate equal to the dividend growth rate.

D. Decrease over time at a rate equal to the dividend growth rate.

E. Remain unchanged.

(2) Dividend models suggest that ____________ determine the value of a financial asset to which the owner is entitled while holding the asset.

A. Current cash flows.

B. Past cash flows.

C. Future cash flows.

D. Past and present cash flows.

E. Past and future cash flows