Dividend Discount Model

Knowledge Center





Summary, forum, best practices, expert tips and information sources.

 

What is the Dividend Discount Model? Meaning.

The Dividend Discount Model is a valuation technique that estimates the price a stock will be trading by calculating the Net Present Value of all expected future dividend payments discounted by an appropriate risk-adjusted rate.


Two well-known variants of this model are:

  • Stable model. Best suited for firms experiencing long-term stable growth, the model assumes the firm grows at a rate equal to the long-term nominal growth rate of the economy (inflation plus real growth in GDP).

  • Two-stage model. Assumes that the company will experience a period of high-growth followed by a decline to a stable growth period.

Both variants are very sensitive to the assumptions made regarding growth rates, time frame, and the required rate of return.


Dividend Discount Model Special Interest Group


Special Interest Group (5 members)

Forum about Dividend Discount Model  

The most recent topics about: Dividend Discount Model.



Best Practices about Dividend Discount Model

Here you will find the most valuable ideas and practical suggestions.


Expert Tips about Dividend Discount Model

Here you will find professional advices by experts.


Information Sources about Dividend Discount Model

Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops.



Compare with: Net Present Value  |  Discounted Cash Flow  |  Dividend Payout Ratio

Special Interest Group Leader

Are you an expert in Dividend Discount Model? Sign up for free

Link to this knowledge center

Copy this code to your web site:

 
 

Return to Management Hub: Decision-making & Valuation  |  Finance & Investing


More on Management  |  Return to Management Dictionary  | 

 

This ends our Dividend Discount Model summary and forum.



About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
2020 12manage - The Executive Fast Track. V15.6 - Last updated: 19-10-2020. All names of their owners.