Once this task is complete, calculate the expected growth rate using the Constant Growth (or Gordon Growth) Model.
Calculate the Dividend Growth Rate of MT 217 for Constant Growth Model (CGM)
We use actual MT 217 history
PV.................................................................. ($1.29) Dividend paid in 2002
FV ....................................................................$1.63 Dividend Paid in 2008
n ....................................................................................................................6
PMT ..............................................................................................................0
Rate.....................................? This will be the Dividend Growth Rate . = g
Constant Growth Model
P0 = D1 / r – g