Which of the Following Statements Is Correct

question 45

Multiple Choice

Which of the following statements is correct?

• A)The constant growth model takes into consideration the capital gains investors expect to earn on a stock.
• B)Two firms with the same expected dividend and growth rate must also have the same stock price.
• C)It is appropriate to use the constant growth model to estimate stock value even if the growth rate is never expected to become constant.
• D)The price of a stock is the present value of all expected future dividends, discounted at the dividend growth rate.