Why Would We Want to Assume a Constant Growth to Dividends

question 73

Multiple Choice

Why would we want to assume a constant growth to dividends if we seldom see a firm with this type of pattern?

• A)The answer is that we really want to estimate a series of future dividends and can only do this if we have a growth rate.
• B)The answer is that we do not need to estimate future capital gains and can only do this if we have a growth rate.
• C)The answer is that we really want to estimate a series of past dividends and can only do this if we have a growth rate.
• D)The answer is that we really want to estimate the past capital gains and can only do this if we have a growth rate.

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