In Example $2($from Chapter $7)$ Coca$-$Cola

Answer be valued adequately with a dividend discount model $($DDM$)$ because the dividends paid and the earnings per share have a very $$ relationship. If dividends do not bear an understandable relation to value creation in the company, applying the DDM to value the stock is likely to be $.$ In a situation like this, discounting $$ might be a better method for valuation.

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