Constant growth valuation formula

Question # 00767737 Posted By: Riley405 Updated on: 06/26/2020 04:03 AM Due on: 07/02/2020
Subject Finance Topic Finance Tutorials:
Question
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Which of the following conditions must hold true for eth constant growth valuation formula to be useful and give meaningful results?

a. the required rate of return, rs, must be greater than the long run growth rate.

b. the company's stock cannot be a zero growth stock.

c. the company's growth rare needs to change as the company matures.

 

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