The Constant-Growth Dividend Discount Model (DDM) Can Be Used Only

question 46

Multiple Choice

The constant-growth dividend discount model (DDM) can be used only when the ________.

• A) growth rate is less than or equal to the required return
• B) growth rate is greater than or equal to the required return
• C) growth rate is less than the required return
• D) growth rate is greater than the required return

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Definitions:

Fee Simple Absolute

Fee simple absolute is the most complete form of ownership of real estate, providing unlimited control subject to government restrictions and commitments.

Unconditional Power

Absolute authority or control without any restrictions or conditions.

Dispose

The act of selling, transferring, or getting rid of an asset or property.

Property

Assets or rights owned by individuals or entities, which can be tangible or intangible, and are subject to ownership claims.