M
Milo
Guest
1) According to the discounted dividends model, the price of a stock should be (r=risk adjusted discount rate, g= growth rate of dividends)
a) D*r*g
b) D+r+g
c) D/(r-g)
d) r/(D-g)
I think it's c, but wanted to make sure.
2) The reason we discount future money is
a) interest
b) inflation
c) elasticity
d) deflating
Not sure, but I think it's b.
3) According to the discounted dividends model, which of the following should INCREASE the value of a stock (r=risk adjusted discount rate, g= growth rate of dividends)
a) an decrease in D or a decrease in r or an decrease in g
b) an increase in D or a increase in r or an increase in g
c) an decrease in D or a decrease in r or an increase in g
d) an increase in D or a decrease in r or an increase in g
I think it's either b or d here.
-Thanks for any help.
a) D*r*g
b) D+r+g
c) D/(r-g)
d) r/(D-g)
I think it's c, but wanted to make sure.
2) The reason we discount future money is
a) interest
b) inflation
c) elasticity
d) deflating
Not sure, but I think it's b.
3) According to the discounted dividends model, which of the following should INCREASE the value of a stock (r=risk adjusted discount rate, g= growth rate of dividends)
a) an decrease in D or a decrease in r or an decrease in g
b) an increase in D or a increase in r or an increase in g
c) an decrease in D or a decrease in r or an increase in g
d) an increase in D or a decrease in r or an increase in g
I think it's either b or d here.
-Thanks for any help.