Which One of the Following Statements Concerning the Dividend Growth

question 262

Multiple Choice

Which one of the following statements concerning the dividend growth model is correct?

• A) One of the advantages is that it applies to all dividend paying stocks.
• B) The estimated cost of equity financing is very dependent upon the assumed rate of growth.
• C) The estimated cost of equity will be directly affected by changes in the risk-free rate of return.
• D) The risk level of the use of the funds will be directly considered by the model.
• E) The main problem with the model is that it is so simplistic.

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