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Gordon's Dividend Growth model is one of the Discounted Cash Flow stock valuation models. Assuming dividend grows at a constant rate of g, GDG predicts
Gordon's Dividend Growth model is one of the Discounted Cash Flow stock valuation models. Assuming dividend grows at a constant rate of g, GDG predicts that PV = D1 / (k - g). Please use Gordon's Dividend Growth model to answer the following questions:
c. What about a decrease in the interest rate? How would k, g, and PV be affected as interest rates go down? Will tech stock lead market ups as interest rates go down?
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