When estimating the cost of equity using the DDM,the factor that is the most apt to add error to this estimate is the:

Question

Quizplus · Accepted Answer

The dividend growth rate is the most subjective and uncertain factor in the DDM. Estimating future growth rates can vary greatly depending on factors such as industry trends, company performance, and macroeconomic conditions. As such, it is the most likely factor to introduce error into the cost of equity estimate.

When Estimating the Cost of Equity Using the DDM,the Factor