One method of estimating the dividend growth rate is to calculate the discount rate that equates today's dividend with the dividend paid several years ago.

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The dividend growth rate is the rate at which the dividend is expected to grow over time. One way to estimate this rate is to calculate the discount rate that equates today's dividend with the dividend paid several years ago. This discount rate is the rate at which the future dividend must be discounted back to today's value in order to equal the current dividend. The dividend growth rate is then the difference between the discount rate and the current dividend yield.

One Method of Estimating the Dividend Growth Rate Is to Calculate