Using the constant growth dividend valuation model and assuming dividends will growth a constant rate forever,the increase in the value of the stock each year should be equal to the

Question

Quizplus · Accepted Answer

According to the constant growth dividend valuation model, the increase in the value of the stock each year should be equal to the growth rate in dividends (represented by "g"). This assumes that dividends will grow at a constant rate forever, so the increase in stock value will also grow at this rate. Therefore, the correct choice is A.

Using the Constant Growth Dividend Valuation Model and Assuming Dividends