Which combination of the following represents the assumptions of the Walter’s dividend model? I. The company has a very long or perpetual life. II. All earnings are either reinvested internally or distributed as dividend. III. There is no floatation cost for the company. IV. Cost of capital of the company is constant.

The first assumption, that the company has a very long or perpetual life, is necessary because the model assumes that the company will continue to pay dividends forever. This assumption is not always realistic, but it is a necessary simplification in order to make the model tractable.

The second assumption, that all earnings are either reinvested internally or distributed as dividend, is also necessary for the model to work. If the company were to spend some of its earnings on things other than dividends or reinvestment, then the model would not be able to accurately predict the future value of the stock.

The third assumption, that there is no floatation cost for the company, is not as important as the first two assumptions. However, it is still a simplification that makes the model easier to use.

The fourth assumption, that the cost of capital of the company is constant, is also not as important as the first two assumptions. However, it is still a simplification that makes the model easier to use.

In conclusion, the correct answer is C. I, II, IV.