Question
Which of the following statements is correct? A. a. According to the text, the constant growth model is especially useful in situations where g is
Which of the following statements is correct?
A. a. According to the text, the constant growth model is especially useful in situations where g is greater than 15 percent and rs is 10 percent or less.
B. b. According to the text, the constant growth model can be used as one part of the process of finding the value of a stock which is expected to experience a very rapid rate of growth for a few years and then to grow at a constant ("normal") rate.
C. c. According to the text, the constant growth model cannot be used unless g is greater than zero.
D. d. According to the text, the constant growth model cannot be used unless the constant g is greater than r.
E. e. Statements a, b, c, and d are all true.
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