Using the dividend growth model to value stocks

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Reference no: EM131010423

Assume you are using the dividend growth model to value stocks. If you expect the market rate of return to increase across the board on all equity securities, then you should also expect the:

market values of all stocks to increase.

stocks that do not pay dividends to decrease in price while the dividend-paying stocks maintain a constant price.

market values of all stocks to remain constant as the dividend growth will offset the increase in the market rate.

dividend growth rates to increase to offset this change.

market values of all stocks to decrease.

Reference no: EM131010423

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