List any four assumptions of Gorden's Model.

Gordon's model is based on the following assumptions: Firm is an all equity firm i.e. no debt.IRR will remain constant, because change in IRR will change the growth rate and consequently the value will be affected. Hence this assumption is necessary.K e will remain constant, because change in discount rate will affect the present value.Retention ratio (b), once decide upon, is constant i.e. constant dividend payout ratio will be followed.Growth rate (g = br) is also constant, since retention ratio and IRR will remain unchanged and growth, which is the function of these two variable will remain unaffected.K e > g, this assumption is necessary and based on the principles of series of sum of geometric progression for 'n' number of years.All investment proposals of the firm are to be financed through retained earnings only.