Easy# Using the Constant (Gordon) Growth Model to Value a Stock (JJH)

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JJH, Incorporated is a stable, mature company that has an average growth rate of 2.0%, demonstrated over roughly five years. It is expected to continue indefinitely. The investor's required rate of return is 2.5%, and JJH is paying a \$0.50 dividend this year. The stock is trading for \$75 per share.

What does the Constant (Gordon) Growth Model say about the company's value in relation to its market price?