A. dividend discount model approach. B. capital asset pricing model approach. C. bond yield plus risk premium approach. 【答案】C 【解析】运用CAPM:estimated cost of common equity = 3% + 0.89(12% - 3%) = 11%. 运用DDM:growth rate = (0.3)(0.2)=6%,estimated cost of common equity = $...
Enter the Dividend Discount Model You can take that same approach, and tailor it specifically for analyzing a stock that pays dividends. This method is the Dividend Discount Model (DDM). It’s also called the Dividend Growth Model, and the most straightforward form is called the Gordon Growth...
Dividend Discount ModelGordon Growth ModelReal OptionsLong-Run GrowthDynamic ProgrammingWe derive a dynamic model of the firm with endogenous investment and leverage ratio within the framework of the dividend discount model (DDM). Our valuation model incorporates two relevant components, namely, ...
(i) the returns predicted by the capital asset pricing model (CAPM); (ii) the other fi nancial information provided. (10 marks) (b) Calculate and comment on the share price of QSX Co using the dividend growth model in the following circumstances: (i) based on the historical information ...
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(b) Discuss the limitations of the dividend growth model as a way of valuing the ordinary shares of a company. (4 marks) 点击查看答案 第2题 The directors of Plam Co expect that interest rates will fall over the next year and they are looking forward to paying less interest on the ...
by Julia Roknifard Amidst the ongoing tensions and the looming threat of further escalation in the Middle East, a distinct player has emerged: China, with its unique and stabilizing approach to the region. In the past, the region was a "playground" for the United States, to the detriment ...
While useful in theory, there are some drawbacks of dividend discount models like the Gordon Growth Model. First, the model assumes a constant rate of growth in dividends per share paid by a company. In reality, many companies vary their dividend rates based on the business cycle, the state ...
However, this approach brings even more assumptions into the model. It doesn't assume that a dividend will grow at a constant rate, but it must guess when and by how much a dividend will change over time. Investors build a DDM using one of a number of assumptions. These may include an...
In this case, the ratio is 0.125 for all six years, which makes this company an ideal candidate for the dividend discount model. The Gordon Growth Model (GGM) is widely used to determine the intrinsic value of a stock based on a future series of dividends that grow at a constant rate...