In the constant growth dividend valuation model, it is assumed that the ____.
A) dividend growth rate exceeds the required rate of return
B) firm's future dividend payments are expected to grow at a constant rate forever
C) dividend cannot be forecast for any future time
D) firm is experiencing a period of poor performance, after which normal growth is expected

Question

Quizplus · Accepted Answer

In the constant growth dividend valuation model, it is assumed that the firm's future dividend payments are expected to grow at a constant rate forever. This rate is assumed to be constant and sustainable over time.

In the Constant Growth Dividend Valuation Model, It Is Assumed