To estimate the required rate of return on common equity,the DCF method can be used only for constant growth stocks.

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The DCF method can be used for both constant growth and non-constant growth stocks. For constant growth stocks, it is easier to calculate the required rate of return because the growth rate is assumed to be constant, but for non-constant growth stocks, more complex methods are required to estimate the required rate of return.

To Estimate the Required Rate of Return on Common Equity,the