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Hi Dear Tutor, I have a question.
Gordon growth model
Why the examiner has taken past profits and dividends all instead of taking just one year profit and dividend?
Thanks in advance.
We are trying to calculate the retention policy we expect in the future, but have only the past figures to base it on. It makes more sense to look at the average rather than just one year because that one year could be unusually high or unusually low.
In fact in this question it would make no difference if you had just looked at the latest year and you would still have got the marks.
If I take 10.1-6=4.1/10.1*100%=41% you mean this will also be acceptable?I calculated in this way before looking at the answer and then saw it has been calculated differently.I got the same percentage but I do not know whether other examples would give the same answer or not.
Thank you in advance.Dear Tutor, I will come to the example in Performance management(hotel example) and do not close it please.i will have questions
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