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solve this problemWhich of the following statements are correct regarding the dividend growth model under constant growth: I. Holding the required rate constant, increases in
solve this problemWhich of the following statements are correct regarding the
dividend growth model under constant growth:
I. Holding the required rate constant, increases in the capital gains
rate yield higher stock prices.
II As the discount rate increases, stock prices generally increase.
III. Holding the capital gains rate constant, if investors demand a
higher dividend yield the stock price should decrease.
IV As the capital gains rate approaches the discount rate, the stock
price goes to infinity.
I only
I and II only
I, II and IV only
I, III, and IV only
I, II III, and IV
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