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Criticism of Gordon’s Model In Dividend Theories

Criticism of Gordon’s Model In Dividend Theories:

Gordon’s model consists of the following important criticisms:

finance
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1. Gordon model assumes that there is no debt and equity finance used by the firm. It is not applicable to present day business.

2. Ke and r cannot be constant in the real practice. According to Gordon’s model, there are no tax paid by the firm. It is not practically applicable.

Criticism of Gordon’s Model In Dividend Theories Criticism of Gordon’s Model In Dividend Theories Reviewed by Ikpokolo Francis on Monday, June 26, 2017 Rating: 5

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