Which One of the Following Is an Underlying Assumption of the Dividend

Multiple Choice

Which one of the following is an underlying assumption of the dividend growth model?

A) A stock has the same value to every investor.
B) A stock's value is equal to the discounted present value of the future cash flows which it generates.
C) A stock's value changes in direct relation to the required return.
D) Stocks that pay the same annual dividend have equal market values.
E) The dividend growth rate is inversely related to a stock's market price.