- This topic has 3 replies, 2 voices, and was last updated 6 years ago by
John Moffat.
John Moffat.Viewing 4 posts - 1 through 4 (of 4 total)
-
Posts
-
josy87
- Topics: 173
- Replies: 215
- ☆☆☆
Dividend growth model value (using historic dividend growth rate)
Historic dividend growth rate = [(6·0m/5·0m)1/3 – 1] x 100 = 6·27%
An assumption is made that future dividend growth is similar to historic dividend growth.
Value of GWW Co = (6m x 1·0627)/(0·09 – 0·0627) = $234 millionsir the ( D1 /pa) + g dividend, in some cases, ke use d1(1+g)/pa +g
in other is d1/pa
im confused, should i used the latest dividend with (!+g) or just the dividend alone in the numerator ?
thanks
John Moffat
- Topics: 57
- Replies: 50549
- ☆☆☆☆☆
The formula has as the numerator Do(1+g).
This is the same as the dividend in 1 years time (D1) because the dividend in 1 years time will be the current dividend multiplied by 1+g.
josy87
- Topics: 173
- Replies: 215
- ☆☆☆
thanks
John Moffat
- Topics: 57
- Replies: 50549
- ☆☆☆☆☆
You are welcome 🙂
josy87
John MoffatViewing 4 posts - 1 through 4 (of 4 total)
- You must be logged in to reply to this topic.