Hello everyone Just need to confirm one thing in the qus. attached below. It's written here that : The dividends will be paid annually in perpetuity and will grow in line with a constant rate of inflation. Does it mean that both the growth and inflation are present. And both rates are same? It seems to be the case after looking at the solution. But I didn't get by reading the qus. that they mean to say, the dividend will be increasing by a growth rate and there's an inflation also present. Could anyone please clarify? Thanks
Yes - here there is a dividend growth rate, and an inflation rate, and these two rates are equal to each other.
