The Required Rate of Return for common stock is K_e = (D₁/P₀) + g. What are the assumptions of the model? A) Growth (g) is constant to infinity. B) The price earnings ratio stays the same. C) The firm must pay a dividend to use this model. D) All of these options are assumptions of the model.

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All of these options are assumptions of the model. The model assumes that the growth rate (g) is constant to infinity, the price-earnings ratio remains constant, and the firm pays a dividend.

The Required Rate of Return for Common Stock Is Ke

The Required Rate of Return for Common Stock Is K_e