Historical growth rates are useful for stock valuation only to the extent they help forecast the future growth in dividends.

Question

Quizplus · Accepted Answer

Historical growth rates can provide insight into a company's past performance, but they may not necessarily be indicative of future growth. However, if used in conjunction with other factors (such as management forecasts, industry trends, and financial analysis), historical growth rates can help investors project potential future dividend growth and ultimately assist in stock valuation.

Historical Growth Rates Are Useful for Stock Valuation Only to the Extent