Question
63.) For a firm that pays no dividends, a. Its return on equity will equal its sustainable growth rate. b. It is unable to pay
63.) For a firm that pays no dividends,
a. Its return on equity will equal its sustainable growth rate.
b. It is unable to pay any dividends.
c. It will have restrictions on its sustainable growth.
d. Its shareholders will require a return equal to its return on equity.
64.) Which of the following statements regarding the advantages of using the H Model to price the equity of a firm is most likely to be accurate?
a. It has a reasonable decline in growth rate assumption.
b. It is more accurate when a large difference between high growth rate and low growth rate exists.
c. It considers rapidly increasing growth rates in dividends.
d. It can be used when a firm pays no dividends.
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