DVM / Earnings Yeild

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November 28, 2018 at 2:44 am #486205
pratim
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When Incorporating Growth In Any Of The Above Two Models, Why Do We Add Growth Factor In Dividend Or Earnings And Then Deduct It From Cost Of Equity Or Earnings Yield?
November 28, 2018 at 6:19 am #486223
John Moffat
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The formula is easily derived from the discounting of an inflating perpetuity. However proving it is not in the syllabus – you are given the formula in the exam.
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