Using the Gordon growth formula, if D1 is $1.00, ke is 10% or 0.10, and g is 5% or 0.05, then the...

1) Using the Gordon growth formula, if D1 is $1.00, ke is 10% or 0.10, and g is 5% or 0.05, then the current stock price is

A) $10.

B) $20.

C) $30.

D) $40.

2) One of the assumptions of the Gordon Growth Model is that dividends will continue growing at ________ rate.

A) an increasing

B) a fast

C) a constant

D) an escalating

3) In the Gordon Growth Model, the growth rate is assumed to be ________ the required return on equity.

A) greater than

B) equal to

C) less than

D) proportional to