The constant dividend growth model is: Select one: a. generally used in practice

Question

The constant dividend growth model is:

Select one:

a. generally used in practice because most stocks have a constant growth rate.

b. generally used in practice because the historical growth rate of most stocks is constant.

c. generally not used in practice because most stocks grow at a non constant rate.

d. generally not used in practice because the constant growth rate is usually higher than the required rate of return.

e. based on the assumption Dow 30 represents a good estimate of the market index.

Explanation / Answer

c. generally not used in practice because most stocks grow at a non constant rate.

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