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The dividend growth model cannot be used to compute the cost of equity for a firm that: Pays an increasing dividend. Reduces its dividend on
The dividend growth model cannot be used to compute the cost of equity for a firm that:
Pays an increasing dividend. |
Reduces its dividend on a regular basis. |
Has a dividend payout ratio of 100 percent. |
Pays a constant dividend year after year. |
Has a retention ratio of 100 percent. |
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