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To be used appropriately, the constant growth dividend discount model requires: A company's cost of common equity capital be larger than its dividend growth rate
To be used appropriately, the constant growth dividend discount model requires:
- A company's cost of common equity capital be larger than its dividend growth rate
- The company be mature with a growth rate that is approximately equal to, or less than, the growth rate of the overall economy
- The company's growth rate remains approximately the same forever
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All of the above
Statements 1 and 2 only
Statement 2 only
Statements 2 and 3 are correct
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