One of the assumptions of the Gordon Growth Model is that dividends will continue growing at ________ rate.
A)an increasing
B)a fast
C)a constant
D)an escalating

Question

Quizplus · Accepted Answer

The Gordon Growth Model assumes that dividends will continue growing at a constant rate. This rate is also known as the sustainable growth rate and is based on the company's earnings and payout ratio. While companies can increase or decrease their dividend payments, the model assumes a constant growth rate for the sake of simplicity.

One of the Assumptions of the Gordon Growth Model Is