The constant growth valuation formula has dividends in the numerator. dividends are divided by the difference between the required return and dividend growth rate as follows: p0p0 = = d1rs−gd1rs−g1. which of the following statements is true? a. increasing dividends will always decrease the stock price, because the firm is depleting internal funding resources. b. increasing dividends will always increase the stock price. c. increasing dividends may not always increase the stock price, because less earnings may be invested back into the firm and that impedes growth.2. walter utilities is a dividend-paying company and is expected to pay an annual dividend of $0.85 at the end of the year. its dividend is expected to grow at a constant rate of 9.50% per year. if walter’s stock currently trades for $20.50 per share, then the expected rate of return on the stock is: a. 9.56%b. 13.65%c. 11.60%d. 17.75%3. walter’s dividend is expected to grow at a constant growth rate of 9.50% per year. what do you expect to happen to walter’s expected dividend yield in the future? a. it will increase. b. it will decrease. c. it will stay the same.

Nell and kirby are in the process of negotiating their divorce agreement. what should be the tax consequences to nell and kirby if the following, considered individually, became part of the agreement? a. in consideration for her one-half interest in their personal residence, kirby will transfer to nell stock with a value of $200,000 and $50,000 of cash. kirby's cost of the stock was $150,000, and the value of the personal residence is $500,000. they purchased the residence three years ago for $300,000.nell's basis for the stock is $ xkirby's basis in the house is $ xb. nell will receive $1,000 per month for 120 months. if she dies before receiving all 120 payments, the remaining payments will be made to her estate.the payments (qualify, do not qualify) as alimony and are (included in, excluded from) nell's gross income as they are received.c. nell is to have custody of their 12-year-old son, bobby. she is to receive $1,200 per month until bobby (1) dies or (2) attains age 21 (whichever occurs first). after either of these events occurs, nell will receive only $300 per month for the remainder of her life.$ x per month is alimony that is (included in, excluded from) nell's gross income, and the remaining $ x per month is considered (child support, property settlement) and is (nontaxable, taxable) to nell.