Nogrowth Corporation expects their dividend to stay at $0.50 per share each year into the
foreseeable future. Therefore
A) the stock will be valued at $0.50 times the number of years an investor plans to keep it.
B) the value of the stock is positive only if the required return is negative.
C) the value of the stock can be estimated as $0.50 divided by an investor's required rate of
return.
D) the value of the stock cannot be determined using the dividend valuation model because the
growth rate is zero.
C
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