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Which one of the following statements is correct related to the dividend growth model approach to computing the cost of equity? a. The rate of
Which one of the following statements is correct related to the dividend growth model approach to computing the cost of equity?
a. The rate of growth must exceed the required rate of return.
b. When you have growing perpetuity for dividends, prices and dividends grow at the same rate.
c. The annual dividend used in the computation must be for Year 0 if you use Time 0's stock price to compute the return.
d. The cost of equity is equal to the return on the stock multiplied by the stock's beta.
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