B. choose D because it has a higher PI D. choose D because it has a lower Pl 54. The constant growth valuation model (Gordon's Model) is based on the premise that the value of a share of common stock is: A. Determined based on an industry standard P/E multiple. B. Determined by using a measure of relative risk called beta. C. Equal to the present value of all expected future dividends. D. The sum of the dividends and expected capital appreciation. 55. Consider the following statements: Statement 1: A project's IRR can still be positive even if the NPV is below zero. Both statements are correct Statement 2: The NPV approach assumes that the cash flows can be invested at the cost of capital of the project. A. Only statement 1 is correct B. Only statement 2 is correct C. D. Both statements are incorrect