The dividend discount model (DDM)can only be used to value a company's stock if it is expected that the company will pay a dividend that grows at a constant rate in the future.

Question

Quizplus · Accepted Answer

The dividend discount model (DDM) can also be used to value a company's stock if the dividend growth rate is not constant but follows a reasonable pattern or trend. However, using a constant growth rate simplifies the calculation process and makes the model more practical.

The Dividend Discount Model (DDM)can Only Be Used to Value