Pick the incorrect statement(s) from below.

I. Preferred stocks have zero growth dividends.

II. A decrease in the required return will decrease the capital gains yield.

III. A constant dividend stock can be valued using the dividend growth model.

IV. The dividend growth model can be used to compute the current value of any stock.

V. The capital gains yield is the sum of the annual rate of change in a stock's price plus the stocks dividend growth rate.

Multiple Choice

• IV and V only

• III, IV and V only

• I only

• III only

• I and II only