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QUESTION 11 1 points Save Answer Which of the following statements is CORRECT? Oa The constant growth model is often appropriate for evaluating start-up companies
QUESTION 11 1 points Save Answer Which of the following statements is CORRECT? Oa The constant growth model is often appropriate for evaluating start-up companies that do not have a stable history of growth but are expected to reach stable growth within the next few years. O b. The price of a stock is the present value of all expected future dividends, discounted at the dividend growth rate. Oc. The constant growth model cannot be used for a zero growth stock, where the dividend is expected to remain constant over time. d. If a stock has a required rate of return rs" 12% and its dividend is expected to grow at a constant rate of 5%, this implies that the stock's divide yield is also 596. 0 a The stock valuation model, P0 = Dios-g , can be used to value firms whose dividends are expected to decline at a constant rate, ie, to grow a negative rate. QUESTION 12 1 points Save Answe A stock Just paid a dividend of Do-S1.50. The required rate of return is rs 10.1% and the constant growth rate is g-40% What is the current stock price? a $23.70 Ob.$24.31 c.$23.11 d.$25.57 e. $24.93
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