In a variable growth model, the dividend is believed to grow at a constant pace forever after an initial growth period.

Related MCQs

• You want to earn a return of 10% on each of two stocks, A and B. Each of the stocks is expected to pay a dividend of $4 in the upcoming year. The expected growth rate of dividends is 6% for stock A and 5% for stock B. Using the constant-growth DDM, the intrinsic value of stock A _________.
• The constant-growth dividend discount model (DDM) can be used only when the ___________.
• If the market is _______, the period after a favorable (unfavorable) event would not generate returns beyond (less than) what is suggested by an equilibrium model such as CAPM
• Which of the following goals will be considered by the individuals who invest in upcoming companies and wait till the companies to grow and then harvest their profits and move on to other company?
• ________ securities are generally issued for a fixed period and redeemable by the issuer at the end of that period.
• These shares have a preferential right to the payment of dividend and to the return of capital at the time of winding up of the company.
• Over the counter exchange of India was started after the role model of
• Which of the following is not an explanation often given for initial price offering under pricing?
• If the coupon rate is constant, the value of bond when close to maturity will be
• In the stock-price beta estimation for the Coca-Cola Company, the dependent variable is the: