One stock valuation model holds that the value of a share of stock is a function of its future dividends, and that the dividends will increase at an annual rate which will remain unchanged over time. This stock valuation model is known as the

A) dividend reinvestment model.

B) approximate yield model.

C) holding period return model.

D) constant growth dividend valuation model. (Gordon Growth Model)

The September 28,1987 cover story of Fortune Magazine asked "Are Stocks too High?" Then stated "New ways of Valuing Shares Give Some Surprising Answers" The most significant thing about this article is:

A) It discussed the development of the variable growth dividend discount model that allows us to value high tech stocks

B) It made us realize that the traditional ways of valuing stocks were no longer applicable.

C) It was dated just 3 weeks before the largest one day drop in stock prices in U.S. history.

D) (a) and (b)