Question

The constant growth model assumes which of the following?

a. that there are executive stock options available to managers.

b. that there is privately held information.

c. that the stock is efficiently priced.

d. that there is no restricted stock.

Answer 1

The answer would be letter C, because the growth model promotes a rise or a growth in development. In which, it will create the stocks to be efficiently priced as time goes by for it is a requirement in terms of developing or having stocks to rise up in the contribution of the company. Executive stocks are not always available, privately held information does not follow on the relationship of the model and there is a restricted stock.