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Explain How Supernormal Growth of Dividends Is Possible, but Only

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Essay

Explain how supernormal growth of dividends is possible, but only in the short-term.


Definitions:

Quantity Demanded

The total amount of a good or service consumers are willing to purchase at a specific price level at a given time.

Elastic Demand

Elastic demand indicates that the quantity demanded of a good or service significantly changes in response to a change in price.

Necessity

Essential goods or services required for basic living and welfare of individuals.

Luxury

High-quality goods or services that are not essential but are highly desired and associated with wealth or indulgence.

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