A model which makes an assumption about the future growth of dividends is known as:

Related Mcqs:

1. Annual cash dividends divided by annual earnings; or alternatively, dividends per share divided by earning per share is termed as:

   A. Earning per share ratio
   B. Proposed dividend ratio
   C. Dividend payout ratio
   D. Expected dividend ratio

2. Forecast by analysts, retention growth model and historical growth rates are methods used for an______________?

   A. Estimate future growth
   B. Estimate option future value
   C. Estimate option present value
   D. Estimate growth ratio

3. A firm has paid out Rs. 150,000 as dividends from its net income of Rs. 250,000. What is the retention ratio for the firm?

   A. 12%
   B. 25%
   C. 40%
   D. 60%

4. Capital gain expected by stockholders and dividends are included in____________?

   A. Debt rate
   B. Investment return
   C. Interest rate
   D. Cost of equity

5. In retention growth model, payout ratio is subtracted from one to calculate___________?

   A. Present value ratio
   B. Future value ratio
   C. Retention ratio
   D. Growth ratio

6. In calculation of internal rate of return, an assumption states that received cash flow from the project must __________?

   A. be reinvested
   B. not be reinvested
   C. be earned
   D. not be earned

7. The process of determining the present value of a payment or a stream of payments that is to be received in the future is known as:

   A. Discounting
   B. Compounding
   C. Factorization
   D. None of the given options

8. If you have Rs. 850 and you plan to save it for 4 years with an interest rate of 10%, what will be the future value of your savings?

   A. Rs. 1,000
   B. Rs. 1,244
   C. Rs. 1,331
   D. Rs. 1,464

9. Process of calculating future value of money from present value is classified as____________?

   A. Compounding
   B. Discounting
   C. Money value
   D. Stock value

10. Future value of interest if it is calculated two times a year can be a classified as__________________?

    A. Semiannual discounting
    B. Annual discounting
    C. Annual compounding
    D. Semiannual compounding