Questions 1-5. Please explain why you choose the answer

1. The dividend discount model should not be used to value stocks in which the dividend does not grow. A. TRUE

B. FALSE

2. Sustainable growth rates can be estimated by multiplying a firm's ROE by its dividend payout ratio.

A. TRUE

B. FALSE

3. According to the dividend discount model, a stock's price today depends on the investor's horizon for holding the stock.

A. TRUE

B. FALSE

4. The dividend discount model states that today's stock price equals the present value of all expected future dividends.

A. TRUE

B. FALSE

5. The dividend yield of a stock is much like the current yield of a bond. Both ignore prospective capital gains or losses.

A. TRUE

B. FALSE