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Dividend valuation model

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Dividend valuation model

  • This topic has 3 replies, 2 voices, and was last updated 10 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • November 8, 2014 at 7:53 am #208356
    stacie395
    Participant
    • Topics: 39
    • Replies: 54
    • ☆☆

    Some reference materials state that dividend valuation model is only suitable for minority shareholding. How do we justify this…?

    November 8, 2014 at 5:29 pm #208445
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54659
    • ☆☆☆☆☆

    Majority shareholdings are in a position to determine the level of dividend (and hence the dividend growth rate). Minority shareholdings have to accept the current policy.

    November 27, 2014 at 1:44 pm #213816
    stacie395
    Participant
    • Topics: 39
    • Replies: 54
    • ☆☆

    Hi all,

    Wish to verify the following…:-

    (a) For the dividend element (D1) should we take the dividend paid or declared, or both…?

    (b) For the cum div share price, should we minus out dividend paid or declared, or both…?

    Thanx…~

    November 27, 2014 at 3:21 pm #213853
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54659
    • ☆☆☆☆☆

    D1 is the dividend in one years time (Do x (1+g))

    The cum div MV is the ex div MV + the dividend about to be paid.

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