You want to use the constant growth model to estimate the price of a firm’s common...

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You want to use the constant growth model to estimate the price of a firm’s common...

You want to use the constant growth model to estimate the price of a firm’s common stock. What conditions need to be met in order to use this model?

The required return must exceed the growth rate.
The firm should be in a steady state (mature industry).
Both A and B must be met.
No conditions must be met

business finance

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Answer 1

Answer #1

The following conditions need to be met in order to use the constant growth model:-

C. Both A and B must be met.

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Answer 2

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