Identify the special case patterns of dividend growth. More than one answer may be correct. Multiple select question. Discounted growth Fast growth Zero growth Non-constant growth Constant growth Negative growth
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Identify the special case patterns of dividend growth. More than one answer may be correct.
Discounted growth
Fast growth
Zero growth
Non-constant growth
Constant growth
Negative growth
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- There are two basiv assumptions concerning the growth rate that underlie the dividend growth model. Identify one of these assumption and explain why the assumption is logicalThere are two basic assumptions concerning the growth rate that underlie the dividend growth model. Identify one of these assumptions and explain why the assumption is logical. (Answer the question correctly and in-depth.)When using the two - stage dividend growth model,:Multiple Choiceg1 cannot be negative. Pt = Dt/R. g1 must be greater than g2. g1 can be greater than R. R must be less than g1 but greater than g2.
- Dividend policy may be affected by firm level as well as macroeconomic level factors. Select FIVE variables (at least 2 firm-level factors/variables and at least 2 macroeconomic factors/variables) from the list shown below. Explain and discuss the predicted impact of selected factors on dividend policy using relevant theories. i.e. what theories help to predict the positive or negative impact on the dividend payout and why. FIRM-LEVEL FACTOR/VARIABLE Asset growth rate Positive NPV investment opportunities Capital intensity of the production process Free cash flow generated Number of individual shareholders Relative tightness of ownership coalition Size of largest block holder MACROECONOMIC FACTOR/VARIABLE Transaction costs of security issuance Personal tax rates on dividend income Personal tax rates on capital gain Importance of institutional investors Corporate governance power of institutional investors Capital market, relative to intermediated (bank) financingWhat is meant by the term “self-supporting growth rate”? How is this raterelated to the AFN equation, and how can that equation be used to calculatethe self-supporting growth rate?Under what situations would you want to use the constant-growth model for estimating the component cost of equity?
- Once cash flows have been estimated, which of the following investment criteria can be applied to them to make an investment decision? More than one answer may be correct. Multiple select question. YTM IRR Payback period NPV The constant growth dividend discount modelA decrease in which of the following will increase the current value of a share according to the dividend growth model? Required rate of return. Dividend amount. Dividend growth rate. Number of future dividends, provided the number is less than infinite.How do you set up a two-stage dividend growth model on excel?
- Define each of the following terms:a. Target payout ratio; optimal dividend policyb. Dividend irrelevance theory; bird-in-the-hand fallacyc. Information content (signaling) hypothesis; clienteles; clientele effectd. Catering theory; residual dividend modele. Low-regular-dividend-plus-extrasf. Declaration date; holder-of-record date; ex-dividend date; payment dateg. Dividend reinvestment plan (DRIP)h. Stock split; stock dividendi. Stock repurchaseWhich one of the following represents the capital gains yield as used in the dividend growth model?multible choice, In applying the constant-growth dividend model, increasing the market capitalization rate will cause a stock’s intrinsic value to? why? decrease increase remain unchanged. decrease or increase, depending upon other factors.
