1. The growth rate of dividends cannot be permanently greater than the required rate of return.

True

False

2. In applying the variablegrowth dividend valuation model to a company's stock, analysts frequently define the growth rate, g, as equal to

A.the dividend payout ratio multiplied by the firm's retention rate.

B.ROE divided by the dividend payout ratio.

C.ROE multiplied by the firm's retention rate.

D.P/E multiplied by the dividend payout ratio.

3. Which of the following can be considered discounted cash flow methods of stock valuation?

I. The constant growth dividend valuation model

II. The variable growth dividend valuation model

III. The price to cash flow method

IV. The cash flow to equity method

A. I, II, and IV only

B. II, III, and IV only

C.I, II, and III only

D. I, II, III, and IV