The appropriate method to derive the growth rate according to Dividend- Growth Model for equity valuation is
A. Growth rate of sales over a period of time
B. Plough-back ratio multiplied with return-on-equity
C. Plough-back ratio multiplied with net profit margin
D. Growth rate of fixed assets over a period of time
Answer:B
The appropriate method to derive the growth rate according to Dividend- Growth Model for equity valuation is
A. Growth rate of sales over a period of time B. Plough-back ratio multiplied with return-on-equity C. Plough-back ratio multiplied with net profit margin D. Growth rate of fixed assets over a period of time