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9 November, 23:21

The dividend growth model: Multiple Choice is only as reliable as the estimated rate of growth can only be used if historical dividend information is available. applies only when a company is currently paying dividends considers the risk that future dividends may vary from their estimated values. is based solely on historical dividend information

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  1. 10 November, 02:09
    0
    Answer: The correct answer is "is only as reliable as the estimated rate of growth".

    Explanation: The dividend growth model: is only as reliable as the estimated rate of growth because the growth model is a method to assess the price of a company's stock using constant growth and discounting the value of future dividends today.

    This happens because it assumes that the growth that the company will experience is constant.
  2. 10 November, 03:12
    0
    The correct answer is letter "A": is only as reliable as the estimated rate of growth.

    Explanation:

    The dividend growth model, also known as the Gordon Growth Model or GGM, is used to calculate the intrinsic value of a stock today, based on the stock's expected future dividends. The model is most effective when used for large, stable companies in mature markets that have a predictable rate of dividend growth. However, the model ignores factors that affect the market price of a stock such as new products, competition, and investor sentiment.
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