Question: The Constant Dividend Growth Model is based on several underlying assumptions. Which of the following best reflects the core conditions required for the model to

The Constant Dividend Growth Model is based on several underlying assumptions. Which of the following best reflects the core conditions required for the model to be valid?

Group of answer choices

The firm pays dividends that grow at a steady rate, and this growth rate remains less than the required return on equity.

Dividend payments are stable, and the firm

s earnings grow at the same rate as the economy.

Dividends grow at varying rates in the short term but eventually stabilize, and the growth rate must exceed the required return.

The firm retains no earnings, and investors are rational.

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