A model assuming the dividend stays at the same amount forever is the:
AZero growth DDM
BZero credit DDM
CZero coupon DDM
DZero capital DDM
Answer & Solution
Correct answer: A. Zero growth DDM
1. No growth rate enters the calculation at all.
2. Every future dividend is the same figure.
3. That is the zero growth dividend discount model.
_Source: OpenStax Principles of Finance 2e, Chapter 11, Stocks and Stock Valuation._
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