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Investor Valuation Quiz

A basic principle of finance is that the value of any investment is

A stock currently sells for $25 per share and pays $0.24 per year in dividends. What is an investor’s valuation of this stock if she expects it to be selling for $30 in one year and requires 15 percent return on equity investments?

A stock currently sells for $30 per share and pays $1.00 per year in dividends. What is an investor’s valuation of this stock if he expects it to be selling for $37 in one year and requires 12 percent return on equity investments?

In the one-period valuation model, a stock’s value will be higher

In the one-period valuation model, a stock’s value falls if the ______ rises.

In the generalized dividend valuation model a stock’s value depend only on

Which of the following is not an element of the Gordon growth model of stock valuation?

According to the Gordon growth model, what is an investor’s valuation of a stock whose current dividend is $1.00 per year if dividends are expected to grow at a constant rate of 10 percent over a long period of time and the investor’s required return is 11 percent?

According to the Gordon growth model, what is an investor’s valuation of a stock whose current dividend is $1.00 per year if dividends are expected to grow at a constant rate of 10 percent over a long period of time and the investor’s required return is 15 percent?

Holding other things constant, a stock’s value will be highest if its dividend growth rate is