Assume you are looking at many companies with equal risk; which ones will have the highest stock prices?© BrainMass Inc. brainmass.com June 3, 2020, 6:16 pm ad1c9bdddf
By the DDM model, we have the stock pricing formula:
P = D1 / (k-g)
where D1 is the dividend next ...
The solution shows the formula, explains the formula and tells which types of companies will have the higher stock prices.