Once this task is complete, calculate the expected growth rate using the Constant Growth (or Gordon Growth)

Question:

Once this task is complete, calculate the expected growth rate using the Constant Growth (or Gordon Growth) Model.

Calculate the Dividend Growth Rate of MT 217 for Constant Growth Model (CGM)

We use actual MT 217 history

PV.................................................................. ($1.29) Dividend paid in 2002

FV ....................................................................$1.63 Dividend Paid in 2008

n ....................................................................................................................6

PMT ..............................................................................................................0

Rate.....................................?This will be the Dividend Growth Rate . = g

Constant Growth Model

P0 = D1 / r – g

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...