7. Using the Gordon growth model, a stock's price will fall if A. the dividend growth rate increases B. the growth rate of dividends falls
7. Using the Gordon growth model, a stock's price will fall if A. the dividend growth rate increases B. the growth rate of dividends falls C. the required rate of return on equity rises D. the expected sales price rises 8. Using the Gordon growth formula, if Dj is $2.00, ke is 15 percent, and g is 16 percent, then the current stock price is A. -$200 B. $50 C. $100 D. Not applicable 9. Everything else held constant, if the expected return on ABC stock rises from 5 to 10 percent and the expected return on CBS stock is unchanged, then the expected return of holding CBS stock relative to ABC stock and the demand for CBS stock A. rises: rises B. rises; falls C. falls; rises D. falls; falls
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