Question

The constant dividend growth model may be used to find the price of a stock in all of the following situations except:

Answer 1

The regular dividend boom version can be used to discover the rate of a inventory in all the following conditions except:while the anticipated dividend boom fee is much less than the bargain fee.

The required details about  dividend is mentioned in below paragraph.

Understanding the way to gauge dividend-paying groups can deliver us a few perception into how dividends can pump up your go back. A not unusualplace belief is that a excessive dividend yield, indicating the dividend will pay a reasonably excessive percent go back at the inventory rate, is the maximum vital measure; however, a yield this is extensively better than that of different shares in an enterprise might also additionally suggest now no longer an excellent dividend however alternatively a depressed rate (dividend yield = annual dividends in line with share/rate in line with share). The struggling rate, in turn, might also additionally sign a dividend reduce or, worse, the removal of the dividend.

The vital indication of dividend energy isn't a lot a excessive dividend yield however excessive employer quality, which you may find out via its records of dividends, which must growth over time. If you're a long-time period investor, seeking out such groups may be very rewarding.

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