Constant Growth Model and Discount Model

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• Discount Rate

  165158 Constant-Growth Model Constant-Growth Model. A stock sells for $40. The next dividend will be $4 per share.

• Stock valuation

  b) The constant growth model cannot be used for a zero growth stock, where the dividend is expected to remain constant over time.

• The Dividend Discount Model and the CAPM

  There are a several varieties of the Dividend Discount Model including the zero growth model, the constant growth model, and the differential growth model.

• Growth Rate of Dividends (Constant Rate)

  ., D0 = $2) and dividends are expected to grow at a constant rate. What is the growth rate for this stock? The growth rate can be found by using the dividend discount model.

• Constant-Growth Model

  125941 Constant-Growth Model.. Constant-Growth Model. Gentleman Gym just paid its annual dividend of $3 per share, and it is widely expected that the dividend will increase by 5 percent per year indefinitely. 1.

• Constant -Growth Model for equity valuation

  76243 Constant -Growth Model: Constant -Growth Model: Here are data on two stocks, both of which have discount rates of 15 percent.

• Constant Growth Model

  165522 Constant Growth Model - A stock sells for $40. Constant Growth Model A stock sells for $40. The next dividend will be $4 per share.

• Valuation Model

  We then discount the terminal value back to the present value and add it to the present value of the cash flows for the next 5 years. This model is much more accurate than the constant growth model.

• Stock Valuation: Constant-Growth Model

  is calculates using Constant-Growth Model.

• Rate of return on stock.

  What rate of return is the market requiring of the stock this year, based on the dividend discount model? Assume the growth factor is constant and that the stock price is at equilibrium.