9. Constant growth stocks Urban Drapers Inc., a drapery company, has been successfully doing business for the past 15 years. It went public eight years ago and has been paying out a constant dividend of $4.16 per share every year to its shareholders. In its most recent annual report, the company informed investors that it expects to maintain its constant dividend in the foreseeable future and that dividends are not expected to increase. If you are an investor who requires a 19.50% rate of return and you expect dividends to remain constant forever, then your expected valuation for Urban Drapers stock today is _____ per share. Urban Drapers has a sister company named Super Carpeting Inc. (SCI). SCI just paid a dividend (D0) of $3.12 per share, and its annual dividend is expected to grow at a constant rate (g) of 6.50% per year. If the required return (ke) on SCIs stock is 16.25%, then the expected stock price of SCIs shares is _____ per share. Which of the following statements is true about the constant growth model? The constant growth model can be used if a stocks expected constant growth rate is more than its required return.