Suppose you are an investment analyst and are interested in estimating the future dividend for Hamby Corp. You know that Hamby’s dividends grow at an exponential rate—that is,

where D_t is the dividend in year t, D₀ is the dividend this year, and g is the growth rate of dividends (assumed to be constant). Is there any way to transform this model into a linear regression?

Transcribed Image Text:

D = Do(1+g)