The Dividend Growth Model Can Be Used to Compute the Cost

Multiple Choice

The dividend growth model can be used to compute the cost of equity for a firm in which of the following situations?
I.Firms that have a 100 percent retention ratio
II.Firms that pay an unchanging dividend
III.Firms that pay a constantly increasing dividend
IV.Firms that pay an erratically growing dividend

A) I and II only
B) I and IV only
C) II and III only
D) I, II, and III only
E) I, III, and IV only
F) None of the above.