Question 1 6 pts According to the dividend discount model, the value of a stock does not depend on O current dividend O cost of equity growth rate O future dividends Question 2 10 pts If the valuation of a stock is $20 and it currently sells for $25, then 1. the stock is undervalued 2. the stock is overvalued 3. the investor should establish a short(sell) position 4. the investor should establish a long(buy) position 2 & 3 O 2 & 4 O 1& 4 O 1&3 Question 3 7 pts An increase in cost of equity should cause the value of a common stock to rise remain unchanged O remain stable or rise slightly o fall