Which of the following statements is FALSE of the dividend-discount model?
A) We cannot use the dividend-discount model to value the stock of a firm with rapid or changing growth.
B) As firms mature, their growth slows to rates more typical of established companies.
C) The dividend-discount model values the stock based on a forecast of the future dividends paid to shareholders.
D) The simplest forecast for the firm's future dividends states that they will grow at a constant rate, i.e., forever.
Answer: A
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