Equity Investments - Equity Investments Section 2
93. In a Gordon growth model, what happens to the intrinsic value if dividend increases?
- Option : C
- Explanation : When dividend increases, numerator increases. If the payout ratio increases, retention rate decreases and value of g decreases. If g decreases, the denominator increases. As a result, the impact on value if dividend is increased cannot be determined with certainty.
