The constant growth rate dividend discount model

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Reference no: EM131056452

There are three ways to determine g for the constant growth rate dividend discount model. Which of the following would be a good estimate for g for a stock with earnings growing at a constant rate and with dividends being paid out as a constant percentage of earnings.

I the capital gains yield

II the expected return on retained earnings multiplied by the payout ratio

III the rate the dividends have been growing in the past

I only

II only

I and II

I and III

I, II and III

Reference no: EM131056452

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