QUESTION 49

1. The dividend growth model can be used to compute the cost of equity for a firm in which of the following situations? I. Firms that have a 100 percent retention ratio II. Firms that pay an unchanging dividend III. Firms that pay a constantly increasing dividend IV. Firms that pay an erratically growing dividend

   		I and II only
   		I and IV only
   		II and III only
   		I, II, and III only
   		I, III, and IV only