Which of the following statements is correct?
A) Growth stocks usually have relatively high payout ratio.
B) The stock valuation model, P0 = D1/(rs - g) , can be used for firms that have expected negative, but constant, growth rates.
C) The price of a stock is the present value of all expected future dividends, discounted at the dividend growth rate.
D) The constant growth model cannot be used for a zero growth stock, where the dividend is expected to remain constant over time.
Correct Answer:
Verified
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