- This topic has 2 replies, 2 voices, and was last updated 10 years ago by .
Viewing 3 posts - 1 through 3 (of 3 total)
Viewing 3 posts - 1 through 3 (of 3 total)
- You must be logged in to reply to this topic.
OpenTuition recommends the new interactive BPP books for December 2024 exams.
Get your discount code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › The Dividend Discount Model
Hi, Can, you help me wiht the dividend discount model when dividends are not paid next your but will be paid in 3 years and have constant growth after that, for example. Like here :
GXG Co could suspend dividends for two years, and then pay dividends of 25 cents per share from the end of the
third year, increasing dividends annually by 4% per year in subsequent years. Dividends in recent years have grown
by 3% per year
Thank you
I ment, how to calculate market value of shares based on valuation on future dividends
You use the dividend growth model, but because the dividends don’t start for 3 years (instead of in 1 year) you need to discount for the extra 2 years.