Project Part 3 Instructions Please write a two-page report. You report should address the following: 1. What is the dividend discount model? What are the pros and cons of the model? 2. Based on what you observed in Part 1 and Part 2, what are the differences between the dividend paying firm and the mixed payout firm? a. You should discuss their growth trend over the past 30 years. b. You should discuss the differences between the intrinsic value you calculated based on models and the market price. 3. Why some firms choose to pay consistent dividends while other prefer to do stock repurchases? The following readings might help you answer some of the questions above. 1. Brigham, E. and Daves. P. 2018. Intermediate Financial Management, 13th Edition. Cengage a. Chapter 2: Risk and Return: Part I b. Chapter 3: Risk and Return: Part II c. Chapter 8: Basic Stock Valuation d. Chapter 15: Distributions to Shareholders: Dividends and Repurchases 2. Dann, L. 1981. Common stock repurchases: An analysis of returns to bondholders and stockholders. Journal of Financial Economics. Vol 9 Issue 2. 113-138 3. Ivanovski. Z., Narasanov. Z., and Ivanovska. N. 2015. Accuracy of Dividend Discount Model Valuation at Macedonian Stock - Exchange. Journal of International Scientific Publications. Vol 9. 4. Olweny. T. 2011. The Reliability of Dividend Discount Model in Valuation of Common Stock at the Nairobi Stock Exchange. International Journal of Business and Social Science. Vol 2 No 6. 5. Penman, S. 1998. A Synthesis of Equity Valuation Techniques and the Terminal Value Calculation for the Dividend Discount Model. Review of Accounting Studies. Volumn 2 Issue 4, 303-323. Project Part 3 Instructions Please write a two-page report. You report should address the following: 1. What is the dividend discount model? What are the pros and cons of the model? 2. Based on what you observed in Part 1 and Part 2, what are the differences between the dividend paying firm and the mixed payout firm? a. You should discuss their growth trend over the past 30 years. b. You should discuss the differences between the intrinsic value you calculated based on models and the market price. 3. Why some firms choose to pay consistent dividends while other prefer to do stock repurchases? The following readings might help you answer some of the questions above. 1. Brigham, E. and Daves. P. 2018. Intermediate Financial Management, 13th Edition. Cengage a. Chapter 2: Risk and Return: Part I b. Chapter 3: Risk and Return: Part II c. Chapter 8: Basic Stock Valuation d. Chapter 15: Distributions to Shareholders: Dividends and Repurchases 2. Dann, L. 1981. Common stock repurchases: An analysis of returns to bondholders and stockholders. Journal of Financial Economics. Vol 9 Issue 2. 113-138 3. Ivanovski. Z., Narasanov. Z., and Ivanovska. N. 2015. Accuracy of Dividend Discount Model Valuation at Macedonian Stock - Exchange. Journal of International Scientific Publications. Vol 9. 4. Olweny. T. 2011. The Reliability of Dividend Discount Model in Valuation of Common Stock at the Nairobi Stock Exchange. International Journal of Business and Social Science. Vol 2 No 6. 5. Penman, S. 1998. A Synthesis of Equity Valuation Techniques and the Terminal Value Calculation for the Dividend Discount Model. Review of Accounting Studies. Volumn 2 Issue 4, 303-323
