Question

Which of the following conditions must hold true for the constant growth valuation formula to be useful and give meaningful results? The company’s stock cannot be a zero growth stock. The company’s growth rate needs to change as the company matures. The required rate of return, r s , must be greater than the long-run growth rate.

Answer 1

The required rate of return, r s , must be greater than the long-run growth rate.

Step-by-step explanation: