If the model below is to give a "reasonable" valuation of a stock,which of the following is NOT a valid assumption of the model?
Po = [Do(1 + g) ] / (Ke - g)
A) Growth, g, is negative.
B) There will be no growth.
C) The growth rate exceeds the required rate of return.
D) The required return is exceptionally high (Ks > 30%) .
Correct Answer:
Verified
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