Page 1. If the model below is to give a reasonable valuation of a stock, which of the following is not a valid assumption for the model? k, -g a. b. c. d, e. growth, g, is negative there will be no growth, i.e., g is zero the growth rate exceeds the required rate of return the required return is exceptionally high (e. g. ks-30%) all of the above are workable assumptions and are valid the sense that the model can be used even if they hold true. 2. Which equation is valid for determining the sustainable growth rate? a. g Total Assets x Return on equity b. g- Return on equity x Percent of earnings retained c. g Return on equity x Return on total assets d. g - Percent of earnings retained x Return on assets c.g-Total assets x Return on total assets 3. The Lashgari Company is expected to pay a dividend of S1 per share at the end of the year, and that dividend is expected to grow at a constant rate of 5% per year in the future. The company's beta is 1.2, the market risk premium is 5%, and the risk-free rate is 3%, what is the company's current stock price? a. $15.00 b. $20.00 c. $25.00 d. $30.00 e. $35.00 ro 20 F5 F7 F8 F9