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Dividend Discount Model Example: DDM Example GS just paid a dividend of $2.00. The dividend is expected to grow at 5% per year. GS has

Dividend Discount Model Example:

DDM Example

GS just paid a dividend of $2.00. The dividend is expected to grow at 5% per year. GS has a beta of 1.62, the risk free rate is 0.50%, the expected market return is10%.

Compute the current value:

Compute the value in one year:

Compute the expected one year holding period return:

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