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• No issue cost assumption in DVM meaning..?
• No allowance is made for effect of taxation but the model can be modify to incorporate tax… Meaning? (How it can be done)
Kindly explain in detailI have no idea where you read these statements and in what context they were written.
Issue costs are not relevant when using the dividend valuation model to determine the market value of existing shares, because the shares have already been issued. We do ignore transaction costs.
Corporate tax is irrelevant because dividends are not tax allowable. We ignore personal tax and calculations involving personal tax (for all Paper FM topics) is excluded from the syllabus.
Everything relevant for Paper FM is covered in my free lectures. They are a complete free course and cover everything needed to be able to pass the exam well.
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