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10. In Gordons dividend growth model, the estimated share value is: A. positively related to the current annual dividend B. positively related to the required return on the share. C. negatively related to the dividend growth rate. D. positively related to the shares beta.
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Answer #1

Answer is option A).

Explanation: dLelwhere P is the shares value

D is the current annual dividend

g is the dividend growth rate

K is the required rate of return.

This shows that estimated share value is directly proportional to current annual dividend

Inversely proportional to required return on share

Positively related to dividend growth rate.

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