a. is only as reliable as the estimated rate of growth
Dividend growth model is used to estimate the price of a stock. This price is calculated by summing up the present values of expected future dividends by discounting them at the investors' required return and taking into consideration a constant or non-constant growth rate. One of the disadvantages of using this model is that it is difficult to get an accurate estimate of this growth rate.
b) only systematic risk, while standard deviation is a measure of total risk.
Standard deviation is measure of the total risks of an investment. It measures the volatility in return of an investment as a result of both systematic and non-systematic risks. Non-systematic risk includes risk that are unique to a company like poor management, legal suit against the company .
Beta on the hand measures of only systematic risk. Systematic risk is the deviation of return of an investment form the average market return due to economic-wide factors like inflation, interest rate, exchange rate e.t.c
b. only systematic risk, while standard deviation is a measure of total risk.
D,All of the above.
A beta coefficient measures the degree of the volatility, or systematic risk, of an individual stock in comparison to the unsystematic risk in market terms of the entire market. In statistical terms, beta represents the slope of the line through a regression of data points from an individual stock's returns against those of the market.it also measures systematic risk as it is the volatility that affects many industries, stocks, and assets e.t.c. Systematic risk affects the overall market and it is a challenge to predict. Unlike with unsystematic risk, diversification cannot help to smooth systematic risk, because it affects a wide range of assets and securities. For example, the Great Recession was a form of systematic risk; the economic downturn affected the market as a whole.