16. Chapter MC, Section .07, Problem 041 Which of the following statements is CORRECT? Oa. If a stock has a required rate of return r, 12% and its dividend is expected to grow at a constant rate of 5%, this implies that the stock's dividend yield is also 5%. Ob. The price of a stock is the present value of all expected future dividends, discounted at the dividend growth rate. Oc. The constant growth model is often appropriate for evaluating start-up companies that do not have a stable history of growth but are expected to reach stable growth within the next few years. Od. The stock valuation model, Po=D/(rs-g), can be used to value firms whose dividends are expected to decline at a constant rate, i.e., to grow at a negative rate. Oe. The constant growth model cannot be used for a zero growth stock, where the dividend is expected to remain constant over time