Dividend Discount Model

Knowledge Center


Description of Dividend Discount Model. Explanation.


Definition Dividend Discount Model. Description.

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.

Special Interest Group - Dividend Discount Model

Special Interest Group (6 members)

Forum - Dividend Discount Model  

In the forum section you will find recent discussions within this knowledge area.

Best Practices - Dividend Discount Model

In the best practices section you will find the best forum discussions within this knowledge area.

Expert Tips - Dividend Discount Model

In the expert tips section you will find advices from experts within this knowledge area.

Resources - Dividend Discount Model

In the Resources section you will find powerpoint presentations, micro-learning videos, articles, news items, etc. within this knowledge area.


News about Dividend Discount Model


Videos about Dividend Discount Model


Presentations about Dividend Discount Model


Books about Dividend Discount Model


More about Dividend Discount Model


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

Special Interest Group Leader

You here? Sign up for free


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
2019 12manage - The Executive Fast Track. V15.0 - Last updated: 25-6-2019. All names of their owners.