sarahmackenzie2533 sarahmackenzie2533

28-10-2022
Business

Answered

the constant growth stock valuation model can't be used under which of the following conditions? group of answer choices a zero growth rate a negative growth rate. a growth rate less than the stock's required return. a growth rate greater than the stock's required return.

Answer :

tutorconsortium206 tutorconsortium206

02-11-2022

D) Under a growth rate greater than the stock's required return, the constant growth stock valuation model cannot be applied.

Describe growth stock.

Any stock in a company that is expected to increase in value significantly faster than the market as a whole is considered a growth stock. Typically, these stocks don't pay dividends.

This is so because companies that issue growth stocks typically want to reinvest any earnings they generate to hasten growth in the short term. When investing in growth stocks, investors hope to profit from capital gains when they eventually decide to sell their shares in the future.

What Qualifies as a Growth Stock?

When it comes to stocks, "growth" refers to the company's significant potential for capital growth. These are frequently newer, smaller-cap companies, or those operating in expanding industries like biotechnology or technology. Growth stocks frequently have high P/E ratios despite having low or even negative earnings.

Learn more about growth stock valuation with the help of the given link:

brainly.com/question/28018384

#SPJ4

Answer Link

Other Questions

4) the threat of direct competition tends to be high when group of answer choices a) there are few firms in an industry and these firms tend to be unequal in si

ou invested $1,000 four years ago. during the four years, you earned annual interest (rate of return) of 5% in year 1, 20% in year 2, 15% in year 3, and 10% in

Why is the interest rate one of the biggest factors when calculating the financial charges on credit cards?

company's balance sheet shows total assets of $300,000 and total liabilities of $200,000. the firm has 50,000 shares of stock outstanding that sell for $10 a sh

Suppose you are thinking about purchasing a small office building for $1,500,000. The 30 year fixed rate mortgage that you have arranged covers 80% of the purch

CAIE Business 9609 A LEVEL. Please help.The objectives and strategies below are part of PepsiCo’s corporate plan. They are based on a comprehensive review by ma

martin has never filed a 2021 tax return despite earning approximately $30,000 providing landscaping work in the community. in what tax year, will the statute o

the repurchase of the target firm's shares of stock that were obtained by the acquiring firm at a premium in exchange for an agreement that the acquirer will no

SUMMARY QUESTIONS 1. Yin Qiang is on the point of launching a new plumbing business but urgently needs extra cash to purchase stock. Identify and explain three

jones estimates that 20,000 direct labor-hours will be worked during the year. what will the predetermined overhead rate per direct labor-hour be?