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Hi John,
I’m confused as to to when to multiply the numerator with the growth % and when not to.
eg. D/ ke – g vs
after calculating the growth, use the growth in the Dividend Valuation model as
d*(1+g)/ ke-g.
Kind regards,
ShohaniTo get a market value ‘now’ we always use the dividend in 1 years time as the numerator.
The dividend in 1 years time is the dividend just paid, together with a years growth i.e. Do(1+g).
I think you might be referring to questions in which the growth starts later that in 1 years time.
If you watch my free lectures on the valuation of securities, I do explain all this (and how to deal with dividends where the growth starts later).
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