Omega Inc. has a history of abnormally high growth due to general economic fluctuations. Estimating the cost of common equity using the discounted cash flow approach is difficult because:?
A. ?the dividend yield is extremely difficult to estimate.
B. ?the proper growth rate is difficult to establish.
C. ?the market price of the common equity is very volatile.
D. ?the firm grows at a constant rate in perpetuity.
E. ?the firm's historical data of dividend yield is unavailable.
Answer: B
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