TRUE or FALSE: DDM and cash dividend A. The P0 computed by DDM is called ex-dividend price, meaning the stock price that excludes the current-period cash dividend. True or False? B. Company’s stock price will immediately decline in response to cash dividend payout. True or False? C. At cash dividend payout, the firm's book value and market value both decline by the same dollar amount per share. True or False? D. The drop in stock price by the amount of cash dividend makes the stock undervalued as it becomes cheaper. True or False?
Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
TRUE or FALSE:
A. The P0 computed by DDM is called ex-dividend price, meaning the stock price that excludes the current-period cash dividend. True or False?
B. Company’s stock price will immediately decline in response to cash dividend payout. True or False?
C. At cash dividend payout, the firm's book value and market value both decline by the same dollar amount per share. True or False?
D. The drop in stock price by the amount of cash dividend makes the stock undervalued as it becomes cheaper. True or False?
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