Explore BrainMass

Explore BrainMass

    Dividend Discount Model

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Please do not submit any financial statements-just the answers and any calculations.
    Use the Kellogg Company 10-Q for Q1 ending 2004-03-27:
    http://edgarscan.pwcglobal.com/servlets/getFilingDetail?accession=0000055067-04-000184

    Use the dividend discount model (DDM) to calculate the price of Kellogg common equity.

    Guidelines:
    - Use annual dividends in your model.
    - Assume a growth rate of 10% for the first four years.
    - In year five (and thereafter) assume a growth rate of 2% per annum for the dividend.
    - Use a discount rate of 12%

    © BrainMass Inc. brainmass.com March 4, 2021, 6:00 pm ad1c9bdddf
    https://brainmass.com/business/dividend-yield/dividend-discount-model-example-22932

    Solution Summary

    This solution uses the dividend discount model (DDM) to calculate the price of a common equity.

    $2.49

    ADVERTISEMENT