The constant growth model of equity valuation assumes that ___________________.

The dividends paid by the company remain constant

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The dividends paid by the company grow at a constant rate of growth

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The cost of equity may be less than or equal to the growth rate

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The growth rate is less than the cost of equity

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Both (B) and (D) above

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Solution

The correct option is E Both (B) and (D) above
The constant growth model of equity valuation assumes that the dividends paid by the company grow at a constant rate of growth and the growth rate is less than the cost of equity.
Hence, option (E) is the correct answer.

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The constant growth model of equity valuation assumes that ___________________.

The correct option is E Both (B) and (D) aboveThe constant growth model of equity valuation assumes that the dividends paid by the company grow at a constant rate of growth and the growth rate is less than the cost of equity.Hence, option (E) is the correct answer.

The correct option is E Both (B) and (D) above
The constant growth model of equity valuation assumes that the dividends paid by the company grow at a constant rate of growth and the growth rate is less than the cost of equity.
Hence, option (E) is the correct answer.