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Constant growth model

• Also called the Gordon-Shapiro model, an application of the dividend discount model which assumes (1) a fixed growth rate for future dividends and (2) a single discount rate.

• A widely cited dividend valuation approach that assumes that dividends will grow at a constant rate that is less than the required return.

 
 

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 Embedded terms in definition
 Discount rate
Discount
Dividend discount model
Dividends
Dividend
Future
Growth rate
Required return
Return
Valuation
Will
 
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