In addition to the CAPM, the Dividend Growth Model can be used to calculate rs (return to shareholders). Assuming that the corporation is paying dividends to answer the following question.

Dividend Growth Model : The greatest difficulty with this model (rs = DIV1/Po +g) is...

A

A.

estimating DIV1

B.

estimating the return to bondholders

C.

estimating the longterm "g" or growth factor

D.

determining Po, the current price of the stock