DIVIDEND DISCOUNT MODEL According to the dividend discount model (DDM), the current stock price of Wal-Mart represented the present value of expected future dividends, discounted at the investor's required (or expected) rate of return. In theory, one would need to anticipate future dividends in perpetuity or anticipate a "liquidation" or "terminal value" date that would represent a final dividend payment (for example, if a firm wound up business and returned a liquidating dividend). Alternatively, dividends could be estimated for a set number of years, at which point a future stock price could be estimated and treated as a "terminal value." In such a model, the future stock price would represent the present value, at that point, of any future dividends beyond the terminal value date. For example, some analysts were expecting dividends of $0.64 per share in 2006, $0.75 in 2007, $0.85 in 2008, and $0.97 in 2009 and a 2009 stock price of around $83. Some applications of the dividend discount model could be compl