
Explanation:
The Gordon growth model is most appropriate for companies with stable, mature dividend growth patterns. Among the three companies listed, Company 3 would be the most suitable candidate as it likely represents a mature company with predictable dividend growth. The Gordon growth model assumes constant dividend growth indefinitely, which is characteristic of stable, established companies rather than high-growth or cyclical companies.
The Gordon growth model is most appropriate to value:
A
Company 1.
B
Company 2.
C
Company 3.
No comments yet.