The H-model is more flexible than the two-stage dividend discount model (DDM) because:A. payout ratio changes to adjust the changes in growth estimates.B. initial high growth rate declines linearly to the level of stable growth rate.C. terminal value is not sensitive to the estimates of ...
Two-Stage Dividend Discount Model The two-stage model can be used to value companies where the first stage has an unstable initial growth rate. And, there is stable growth in the second stage, which lasts forever. The first stage may have a positive, negative, or volatile growth rate and ...
The user has to enter the following figures into the calculator. This will provide the present value after discounting all the dividends of both time periods (the high growth rate period and the stable growth rate period). Also Read:Two-Stage Growth Model – Dividend Discount Model Dividend– ...