The constant-growth dividend valuation model is best suited for use with
A) stocks of new or emerging companies.
B) small-cap stocks within growing industries.
C) the stocks of mature, dividend-paying companies.
D) the stocks of cyclical companies.

Question

Quizplus · Accepted Answer

The constant-growth dividend valuation model is best suited for mature, dividend-paying companies because it assumes a stable growth rate in dividends, which is more likely with established companies.

The Constant-Growth Dividend Valuation Model Is Best Suited for Use