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Basic Question 6 of 16
According to the Gordon growth model, the dividend yield is equal to the required return minus the dividend growth rate. True or False?
User Contributed Comments 3
| User | Comment |
|---|---|
| katybo | r-g= D/P |
| cong | Required Return of Equity = Div Growth Rate + Dividend Yield Compared it with current yield = coupon/price of bond. |
| bundy | V = D/k-g k-g = d/v d/v = div yield |
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Learning Outcome Statements
explain the rationale for using present value models to value equity and describe the dividend discount and free-cash-flow-to-equity models
calculate and interpret the intrinsic value of an equity security based on the Gordon (constant) growth dividend discount model or a two-stage dividend discount model, as appropriate
identify characteristics of companies for which the constant growth or a multistage dividend discount model is appropriate
explain advantages and disadvantages of each category of valuation model
CFA® 2025 Level I Curriculum, Volume 3, Module 8.