Which of the Following Is True Regarding the Use of the Dividend

Multiple Choice

Which of the following is true regarding the use of the dividend growth model for estimating the cost of equity capital?

A) A key advantage to this model is its high degree of complexity.
B) The results from this model are not sensitive to changes in the dividend growth rate.
C) One method of estimating future growth rates is the use of historical growth rates.
D) The model works particularly well for companies that maintain a mostly unsteady dividend growth rate.
E) The model explicitly considers risk.