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Reading 41: Discounted Dividend Valuation- LOS k~ Q1-3

 

LOS k: Explain the growth phase, transitional phase, and maturity phase of a business.

Q1. In which of the following stages is a firm most likely to distribute the highest proportion of its earnings in the form of dividends?

A)   Transition stage.

B)   Initial growth stage.

C)   Mature stage.

 

Q2. In what stage of growth would a firm most likely NOT pay dividends?

A)   Transition stage.

B)   Declining stage.

C)   Initial growth stage.

 

Q3. Most firms follow a pattern of growth that includes several stages. The second stage of growth is referred to as the:

A)   H-stage.

B)   transitional stage.

C)   mature stage.

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