Question

Infosys Technologies just paid a dividend of $3.00 per share, and
that dividend is expected to grow at a rate of 14% for at least the
next few years. If we assume that this growth rate will continue
forever (in perpetuity), then the Discounted Dividend Model (DDM)
tells us that the value of this stock is negative at a discount
rate of 9%.

true or false?

Answer #1

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