Reference no: EM131499660

1. _______________is the name of the model that we use to determine the present value of a stock based on its next annual dividend, the annual dividend growth rate, and the applicable annual discount rate.

Earnings capitalization model

Capital pricing model

Zero growth model

Discounted dividend model

Dividend growth model

2. The ___________________________________ is a secondary market.

market where warrants are offered and sold

market in which subordinated shares are issued and resold

market conducted solely by brokers

market dominated by dealers

market where outstanding shares of stock are resold

3. The dividend growth model assumes that _____________________________.

a stock's value is equal to the discounted present value of the future cash flows which it generates

a stock's value changes in direct relation to the required return

stocks that pay the same annual dividend have equal market values

a stock has the same value to every investor

the dividend growth rate is inversely related to a stock's market price

4. You will get a $2,000-gift from your uncle when you graduate from college. Your original plan is to graduate three years from now. The present value of this gift will _________ if you speed up your graduation by one year and graduate two years from now.

increase

become negative

decrease

cannot be determined from the information provided

remain constant