Question: The dividend discount model cannot be used to compute the cost of equity for a firm that: Has a dividend payout ratio of 100%. Has

 The dividend discount model cannot be used to compute the cost

The dividend discount model cannot be used to compute the cost of equity for a firm that: Has a dividend payout ratio of 100%. Has a plowback ratio of 100%. Pays a constant dividend year after year. Reduces its dividend on a regular basis. Pays an increasing dividend.

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