CFA Practice Question

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CFA Practice Question

Which of the following assumptions does the Gordon growth dividend discount model require?

I. Dividends grow at a constant rate.
II. The dividend growth rate continues indefinitely.
III. The required rate of return is less than the dividend growth rate.
A. I only
B. I and II only
C. I, II and III

User Contributed Comments 2

User Comment
chuong Required rate of return must be higher than growth rate.
kingirm There is no requirement for growth rate to be constant.
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