Which letter choice is correct?

The underlying assumption of the dividend growth model is that a stock is worth:

Select one:

a. The same amount to every investor regardless of their desired rate of return.

b. The present value of the future income which the stock generates.

c. An amount computed as the next annual dividend divided by the market rate of return.

d. The same amount as any other stock that pays the same current dividend and has the same required rate of return.

e. An amount computed as the next annual dividend divided by the required rate of return.

The constant dividend growth model is:

Select one:

a. Generally used in practice because most stocks have a constant growth rate.

b. Generally used in practice because the historical growth rate of most stocks is constant.

c. Generally not used in practice because most stocks grow at a non constant rate.

d. Generally not used in practice because the constant growth rate is usually higher than the required rate of return.

e. Based on the assumption Dow 30 represents a good estimate of the market index.

The closing price of a stock is quoted at 22.87, with a P/E of 26 and a net change of 1.42. Based on this information, which one of the following statements is correct?

Select one:

a. The closing price on the previous day was $1.42 higher than today's closing price.

b. A dealer will buy the stock at $22.87 and sell it at $26 a share.

c. The stock increased in value between yesterday's close and today's close by $.0142.

d. The earnings per share are equal to 1/26^thof $22.87.

e. The earnings per share have increased by $1.42 this year.