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Why is it not feasible to use the dividend discount model in the valuation of true growth companies?

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Why is it not feasible to use the dividend discount model in the valuation of true growth companies?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...

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Because the dividend model assumes a constant rate of growth fo…View the full answer


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Investment Analysis and Portfolio Management

Investment Analysis and Portfolio Management

ISBN: 978-0538482387

10th Edition

Authors: Frank K. Reilly, Keith C. Brown

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Question Posted: December 17, 2014 10:41:26
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