The constant dividend growth model cannot be used to price the shares of a company when the end of last period dividend is known,but the expected end of this period dividend is not.

Question

Quizplus · Accepted Answer

The constant dividend growth model can still be used if the growth rate of the dividends is known, as the expected dividend can be calculated by applying the growth rate to the last period's dividend.

The Constant Dividend Growth Model Cannot Be Used to Price