Dividend Growth Rate
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Definition of 'Dividend Growth Rate'The annualized percentage rate of growth that a particular stock's dividend undergoes over a period of time. The time period included in the analysis can be of any interval desired, and is calculated by using the least squares method, or by simply taking a simple annualized figure over the time period. |
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Investopedia explains 'Dividend Growth Rate'The dividend growth rate is necessary in order to use the dividend discount model, which is a security pricing model that assumes that a stock's price is determined by the estimated future dividends, discounted by the excess of internal growth over the firm's estimated dividend growth rate.A history of strong dividend growth could mean that future dividend growth is likely, which can signal long-term profitability for a given company. |
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