The cost of capital for common stock is (D1/Po)+g. Which of the following statements is true of this model? L The firm must pay a dividend to be able to use this model II. The growth rate (g) can be...

F3

Extracted text: The cost of capital for common stock is (D1/Po)+g. Which of the following statements is true of this model? L The firm must pay a dividend to be able to use this model II. The growth rate (g) can be changed to reflect expected dividend growth II. The market price-to-earnings ratio is not affected by the model Select one: O A. Ionly O B. Iand II only OC. Iand ll only OD 1, I1, and II