The variable-growth dividend valuation model
A) develops the value of a stock using the future value of dividends minus a rate of capital gain growth.
B) is valuable because it accounts for the general growth patterns of most companies.
C) is invalid if at any point in time the growth rate exceeds the required rate of return.
D) assumes the rate of dividend growth will vary indefinitely.

Question

Quizplus · Accepted Answer

The variable-growth dividend valuation model is valuable because it accounts for the general growth patterns of most companies, which often experience varying growth rates over time.

The Variable-Growth Dividend Valuation Model