The intrinsic value of equity is unknowable

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Reference no: EM131464255

Which of the following is most correct?

a. The intrinsic value of equity is unknowable if the stock does not pay dividends

b. The dividend yield of a stock is equal to the dividend paid divided by the stock’s current price

c. A stock’s required rate of return is the sum of its dividend yield and the expected long term (constant) growth rate of its dividend

d. According to the constant (dividend) growth model, the constant dividend growth rate must be less than or equal to the required rate of return.

e. Of the 3 factors that impact intrinsic value of stock the most, the constant dividend growth rate (g) is by far the most important compared to the dividend payment and the required rate of return.

Reference no: EM131464255

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