Which of the following statements is true or false? The dividend discount model values the stock based on a forecast of the future dividends paid to shareholders. A common approximation is to assume that in the long inn. dividends will grow at a constant rate. Because the cash flows from stock are known with certainty, we can discount them using the risk free interest rate. The capital gain is the difference between the expected sale price and the purchase price of the stock. The firm's weighted average cost of capital (WACC) denoted is the cost of capital that reflects the risk of the overall business which is the combined risk of the firm s equity and debt fn the method of compatibles we estimate the value of the turn based on the value of other, comparable firms or investments that we expect will generate very similar cash flows in the future