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  3. which of the following statements is correct? o o

Which of the following statements is CORRECT? O O a. The price of a stock...

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Finance

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Which of the following statements is CORRECT? O O a. The price of a stock is the present value of all expected future dividends, discounted at the dividend growth rate. b. If a stock has a required rate of return r = 12% and its dividend is expected to grow at a constant rate of 5%, this implies that the stocks dividend yield is also 5%. c. 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. d. The DDM aka, the stock valuation model, P=D/(r - 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. e. The constant growth model cannot be used for a zero growth stock, where the dividend is expected to remain constant over time

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