Which of the following statements is CORRECT? Question 7 options:

The price of a stock is the present value of all expected future dividends, discounted at the dividend growth rate

The stock valuation model, P0 = D1/(rs - g), can be used to value firms whose dividends are expected to decline at a constant rate, i.e., to grow at a negative rate

The constant growth model cannot be used for a zero growth stock, where the dividend is expected to remain constant over time

The constant growth model is often appropriate for evaluating start-up companies that do not have a stable history of growth but are expected to reach stable growth within the next few years.