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Firm value if growth equals discount rate (g = k) in Gordon model:
ABecomes negative
BBecomes mathematically undefined / infinity
CEquals the current dividend
DEquals the perpetual book value (within the standard regulatory framework)
Answer & Solution
Correct answer: B. Becomes mathematically undefined / infinity
1. Identify what the question asks: this concept maps to gordonlimit (§2.4).
2. Apply the framework or formula relevant to the topic.
3. Eliminate distractors and arrive at the correct option (B).
_Source: ICAI BoS CA Final Paper 2, Ch 13 "Business Valuation"_
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