Do you agree with this statement? Why or why not? The main limitation is in assuming that
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Question:
Do you agree with this statement? Why or why not?
The main limitation is in assuming that a dividend will experience constant growth in dividend.Companies are subject to business cycles and it is unrealistic or very unlikely that a company can constantly grow their dividend.For me if the focus is slowly on dividends they might cut R&D or other potential programs or future projects for the cash needed to maintain the dividend growth.Companies should focus on positive growth and not on dividend growth and value.Leaving the dividend as a reward to shareholders for outstanding performance.The dividend growth model puts unrealistic expectations on a company with eventually unobtainable results.
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