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Chapter 07
Equity Markets and Stock Valuation
Multiple Choice Questions
1. What is the name given to the model that computes the present value of a stock by dividing
next years annual dividend amount by the difference between the discount rate and the rate of
change in the annual dividend amount?
A. Stock pricing model
B. Equity pricing model
C. Capital gain model
D. Dividend growth model
E. Present value model
2. The dividend yield is d
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