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When Using the Two-Stage Dividend Growth Model

Question 52

Multiple Choice

When using the two-stage dividend growth model:


A) g₁ cannot be negative.
B) Pt = Dt/R.
C) g₁ must be greater than g₂.
D) g₁ can be greater than R.
E) R must be less than g₁ but greater than g₂.

Correct Answer:

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