When using the Dividend Discount Model, assuming that growth (g) will remain constant, the dividend yield is a good measure of the required return on a common stock under which of the following circumstances?

Question

Quizplus · Accepted Answer

When growth (g) is assumed to be zero, the dividend yield becomes the sole component of the required return on a stock, making it a good measure.

When Using the Dividend Discount Model, Assuming That Growth (G)