Constant-growth model-gordon model


Question: Use the constant-growth model (Gordon model) to the find the value of each firm shown in the table.

Firm Dividend expected  Dividend Required

next year growth rate return
A $1.20 8% 13%
B 4 5 15
C 0.65 10 14
D 6 8 9
E 2.25 8 20

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Finance Basics: Constant-growth model-gordon model
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