QUESTION $25$

stock would also be valued by the general dividend valuation method explained in this chapter.

also be valued by the general dividend valuation method explained in this chapter.

stock would also be valued by the general dividend valuation method explained in this chapter.

QUESTION $26$

Suppose a company has a preferred stock issue and a common stock issue. Both have just paid a $$2$ dividend. Which do you think will have a higher price, a share of the common?

preference, so it is possible the preferred could be worth more, depending on the circumstances.

liquidation preference, so it is possible the preferred could be worth more, depending on the circumstances.

possible the preferred could be worth more, depending on the circumstances.

QUESTION $27$

In the context of the dividend growth model, is it true growth rate in dividends and the growth rate in the price of the stock are identical?

Yes. If the dividend grows at a steady rate, so does the stock price. In other words, the dividend growth rate and the capital gains yield are the same.

No$.$ If the dividend grows at a steady rate, the stock price does not. In other words, the dividend growth rate and the capital gains yield are the same.

No$.$ The capital gains yield and dividend growth rate are not the same.