When valuing a stock using the constant-growth model, \( D_{1} \) represents the: a. expected difference in the stock price over the next year. b. expected stock price in one year. c. the next expected annual dividend. d. discount rate. e. last annual dividend paid.

In the constant-growth model, \( D_{1} \) specifically refers to the next expected annual dividend, which is the amount of money a shareholder can anticipate receiving from the company in dividend payments after one year. This dividend is crucial for calculating the present value of future cash flows that an investor expects to receive from holding the stock. Understanding this concept is key to making informed investment decisions; knowing that \( D_{1} \) is the projected dividend helps you estimate the stock’s future value based on its growth prospects. This model assumes that dividends will grow at a constant rate indefinitely, allowing investors to assess the intrinsic value of a stock more accurately.