Question 7 (3 points) Which of the following statements concerning the constant growth model is TRUE: Do(1+g) ks g D1 Po = ks -g Where: Po = stock price; D1 = next dividend; = last dividend; g = growth rate; k, = expected return Do O 1) The stock price equals the value of the next dividend. O 2) Dividends are assumed to grow at a constant rate. O 3) The model does not consider risk. 4) There is no adjustment for dividend growth