Circumstances in which the constant growth valuation model—the Gordon model—for estimating the value of a share of stock should be used include
A. declining dividends.
B. an erratic dividend stream.
C. the lack of dividends.
D. a steady growth rate in dividends.
Answer:D
Circumstances in which the constant growth valuation model—the Gordon model—for estimating the value of a share of stock should be used include
A. declining dividends. B. an erratic dividend stream. C. the lack of dividends. D. a steady growth rate in dividends.