Suppose Neha just bought stock in CleanAir Co., a renewable energy startup, and that Neha estimates there will be a dividend of $8 per share, paid annually, forever. If the discount rate on the stock is 6 percent, then using the discount dividend model, the value of the stock is: $116.00 per share $122.66 per share $133.33 per share $138.66 per share Now suppose Neha estimates that there will be a dividend of $8 per share paid out next year, and that the dividend is expected to grow at a constant rate of 3 percent per year. If the required rate of return on the stock is 6 percent, then using the discount dividend model, the value of the stock is: $237.34 per share $250.67 per share $266.67 per share $274.67 per share Which of the following are limitations to the dividend discount model? Check all that apply. It can result in inaccurate valuations when the firm being evaluated retains most of its earnings, rather than distributing them as dividends. It assumes that uncertainty cannot be accounted for because it esn't allow expectations about investors' required rate of return to change. It can result in inaccurate valuations when the dividend growth rate is incorrectly estimated. It assumes that the dividend growth rate will never be higher than the required rate of return.

Suppose Neha fust bought stock in CleanAr Co, a renewable energy startup, and that Neha estimates there wil be a dividend of sa per share, paid annially, forever, If the discount rate on the stock is 6 percenk, then using the discount dividend model, the value of the stock is: $116.00 pershare \$122: 66 per share $133.33 per share $138.66 per share Now suppose Neha estimates that there will be a dividend of $8 per share paid out next year, and that the dividend is expected to grow at a constant rate of 3 percent per yeac If the required rate of return on the stock is 6 percent, then using the discount dividend model, the value of the stock is: $237.34 per share $250 t5 beristiace 5266.67 per share 5274.67 pers share Which of the following are lim tations to the dividend discount model? check all that apply. It can rewit in inaccurate valuations when the firm being evaluated retains most of its earrings, rather than distrouting them as dividends. It assumes that uncertainty cannot be accounted for because it doesn't allow expectations about investors' required rate ef return to change: It can rosutt in insccurate valuatons when the dividend grewth rate is incorrectly estimated: It aswumes that the dividend growth rate will never be higher than the required rate of return