Step 4:Finally, the formula for Gordon Growth Model is computed by dividing the next year’s dividend per share by the difference between the investor’s required rate of return and dividend growth rate as shown below. Value of stock = D1/ (k – g) ...
The main limitation of the Gordon growth model lies in its assumption of constant growth in dividends per share. It is very rare for companies to show constant growth in their dividends due tobusiness cyclesand unexpected financial difficulties or successes. The model is thus limited to firms sho...
The Gordon Growth Model calculates the growth rate of a stock using the projected dividend for the next year, the expected yearly growth of the dividend, and the required rate of return. The model assumes that dividend growth will continue at the historical rate, which may not always be the...
Gordon Growth Model (GGM): What are the Pros and Cons? The Gordon Growth Model (GGM) offers a convenient, easy-to-understand method for calculating the approximate value of a company’s share price. As we saw earlier, the single-stage model requires only a handful of assumptions, but ...
What is the Gordon Growth Model Formula?Three variables are included in the Gordon Growth Model formula: (1) D1 or the expected annual dividend per share for the following year, (2) k or the required rate of return, and (3) g or the expected dividend growth rate. With these variables...
网络释义 1. 戈登成长公式 「戈登成长公式」(Gordon growth formula)就是莫顿之命名矛盾的典型例子。不幸地,这类错误一旦发生,就很难更正。 www.books.com.tw|基于3个网页
TheGordon Growth Model (GGM)is a popular approach used to determine the intrinsic value of a stock based on a future series of dividends that grow at a constant rate. Thisdividend growth rateis assumed to be positive as mature companies seek to increase the dividends paid to their investors ...
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百度试题 结果1 题目Using the Gordon growth formula, if D1 is 1.00, ke is 12% or 0.12, and g is 10% or 0.10, then the current stock price is A 20 B 30 C 40 D $50 相关知识点: 试题来源: 解析 D 反馈 收藏
百度试题 题目Using the Gordon growth formula, if the current stock price is 25, ke is 12% or 0.12, and g is 10% or 0.10, then D1 is? 0.500.250.75$1.25 相关知识点: 试题来源: 解析 $0.50 反馈 收藏