10. According to the dividend growth model method of stock valuation, which of the following statements is true, assuming that Mr. Littles client has a required rate of return of 16% and that the dividend has grown from .16 to .24 in three years?

I. The current Stuff Stores stock price exceeds the calculated value.

II. The current Stuff Stores stock price is less than the calculated value

III. Using the dividend growth model as the only measure, the Stuff Stores stock is undervalued.

IV. The market price and the calculated value for Stuff Stores match, closely, as expected given the high degree of efficiency in the markets.

A. I only

B. III only

C. II and III only

D. III and IV only