You are considering investing in a firm and wish to place a value on the common stock. The dividend on the firm's stock has no changed in the last five years. In absence of any information suggesting future changes in the dividend rate, the most appropriate stock valuation model would be the _____

You are considering investing in a firm and wish to place a value on the common stock. The dividend on the firm's stock has no changed in the last five years. In absence of any information suggesting future changes in the dividend rate, the most appropriate stock valuation model would be the ______ model.

A Zero growth

B constant growth

C non-constant growth

D growing perpetuity

Solution

Correct Answer: Option A

Solution

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