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Growth implied in share price

This topic has 1 reply, 2 voices, and was last updated 8 years ago by John Moffat.

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December 9, 2015 at 12:20 pm #289571
darz
Member
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If we have to switch around a formulae in exam. Eg. Using the dividend growth model to find g. If given the share price or value of equity, is there any easy way to remember how to switch around this formulae.
My Maths fails me every time I have to switch a formulae around and I’m a bit worried about this for exams
December 9, 2015 at 1:09 pm #289589
John Moffat
Keymaster
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I really cannot image you ever being asked to find g using the dividend valuation formula.
If you want a formula then here is it (but again it would be an extraordinary thing for the examiner to ask!):
g = ((Po x Re) – Do) / (Do + Po)
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