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The dividend growth model cannot be used to compute the cost ofequity for a firm that: A. Pays an increasing dividend. B. Reduces its dividend

The dividend growth model cannot be used to compute the cost ofequity for a firm that:

A. Pays an increasing dividend.

B. Reduces its dividend on a regular basis.

C. Has a dividend payout ratio of 100 percent.

D. Pays a constant dividend year after year.

F. Has a retention ratio of 100 percent.

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