FIN 301 o | Questions with 100% Verified Answers | Latest
Update 2026/2027
Question: B) Constant-growth model
Answer:
1) What is the model called that determines the market value of a stock based on its next
annual dividend, the dividend growth rate, and the applicable discount rate?
A) Maximal-growth model
B) Constant-growth model
C) Capital pricing model
D) Realized-earnings model
E) Realized-growth model
Question: D) Capital gains yield
Answer:
2) Which one of following is the rate at which a stock's price is expected to appreciate?
A) Current yield
B) Total return
C) Dividend yield
D) Capital gains yield
E) Coupon rate
Question: D) Discount rate
Answer:
3) A decrease in which of the following will increase the current value of a stock
according to the dividend growth model?
A) Dividend amount
B) Number of future dividends, provided the total number of dividends is less than infinite
C) Dividend growth rate
D) Discount rate
E) Both the discount rate and the dividend growth rate
Question: E) requires the growth rate to be less than the required return.
Answer:
4) The dividend growth model:
A) assumes dividends increase at a decreasing rate.
B) only values stocks at Time 0
C) cannot be used to valuc constant dividend stocks.
D) can be used to value both dividend-paying and non-dividend-paying stocks. E)
requires the growth rate to be less than the required return.
, Question: C) a decrease in all stock values.
Answer:
5) Answer this question based on the dividend growth model. If you expect the market
rate of return to increase across the board on all equity securities, then you should also
expect:
A) an increase in all stock values
B) all stock values to remain constant.
C) a decrease in all stock values.
D) dividend-paying stocks to maintain a constant price while non-dividend paying stocks
decrease in value.
E) dividend-paying stocks to increase in price while non-dividend paying stocks remain
constant in value
Question: D) is unsustainable over the long term.
Answer:
6) Supernormal growth is a growth rate that:
A) is both positive and follows a year or more of negative growth.
B) exceeds a firm's previous year's rate of growth
C) is generally constant for an infinite period of time.
D) is unsustainable over the long term. E) applies to a single, abnormal year
Question: c) D)g
Answer:
7) Which one of the following represents the capital gains yield as used in the dividend
growth model?
A) D1
B) D1/Po
c) Po
D) g
E) g/Po
Question: D) Determining the amount of the dividend to be paid per
share
Answer:
8) Which one of the following rights is never directly granted to all shareholders of a
publicly held corporation?
A) Electing the board of directors
B) Receiving a distribution of company profits
C) Voting either for or against a proposed merger or acquisition
D) Determining the amount of the dividend to be paid per share
E) Having first chance to purchase any new equity shares that may be offered
Update 2026/2027
Question: B) Constant-growth model
Answer:
1) What is the model called that determines the market value of a stock based on its next
annual dividend, the dividend growth rate, and the applicable discount rate?
A) Maximal-growth model
B) Constant-growth model
C) Capital pricing model
D) Realized-earnings model
E) Realized-growth model
Question: D) Capital gains yield
Answer:
2) Which one of following is the rate at which a stock's price is expected to appreciate?
A) Current yield
B) Total return
C) Dividend yield
D) Capital gains yield
E) Coupon rate
Question: D) Discount rate
Answer:
3) A decrease in which of the following will increase the current value of a stock
according to the dividend growth model?
A) Dividend amount
B) Number of future dividends, provided the total number of dividends is less than infinite
C) Dividend growth rate
D) Discount rate
E) Both the discount rate and the dividend growth rate
Question: E) requires the growth rate to be less than the required return.
Answer:
4) The dividend growth model:
A) assumes dividends increase at a decreasing rate.
B) only values stocks at Time 0
C) cannot be used to valuc constant dividend stocks.
D) can be used to value both dividend-paying and non-dividend-paying stocks. E)
requires the growth rate to be less than the required return.
, Question: C) a decrease in all stock values.
Answer:
5) Answer this question based on the dividend growth model. If you expect the market
rate of return to increase across the board on all equity securities, then you should also
expect:
A) an increase in all stock values
B) all stock values to remain constant.
C) a decrease in all stock values.
D) dividend-paying stocks to maintain a constant price while non-dividend paying stocks
decrease in value.
E) dividend-paying stocks to increase in price while non-dividend paying stocks remain
constant in value
Question: D) is unsustainable over the long term.
Answer:
6) Supernormal growth is a growth rate that:
A) is both positive and follows a year or more of negative growth.
B) exceeds a firm's previous year's rate of growth
C) is generally constant for an infinite period of time.
D) is unsustainable over the long term. E) applies to a single, abnormal year
Question: c) D)g
Answer:
7) Which one of the following represents the capital gains yield as used in the dividend
growth model?
A) D1
B) D1/Po
c) Po
D) g
E) g/Po
Question: D) Determining the amount of the dividend to be paid per
share
Answer:
8) Which one of the following rights is never directly granted to all shareholders of a
publicly held corporation?
A) Electing the board of directors
B) Receiving a distribution of company profits
C) Voting either for or against a proposed merger or acquisition
D) Determining the amount of the dividend to be paid per share
E) Having first chance to purchase any new equity shares that may be offered
