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The Dividend Discount Model: the Constant Growth Rate Model . Assume that the dividends will grow at a constant growth rate g. The dividend in
The Dividend Discount Model: the Constant Growth Rate Model . Assume that the dividends will grow at a constant growth rate g. The dividend in the next period, (t + 1), is: De+1=D, *(1+g) So, D, ED, *(1+g)-D. *(1+5)*(1+9) For constant dividend growth for "T" years, the DDM formulai Po 1+g D (1+g) k-g 1- if kg 1+k Po =TXD if k=g The Dividend Discount Model: the Constant Growth Rate Model . Assume that the dividends will grow at a constant growth rate g. The dividend in the next period, (t + 1), is: De+1=D, *(1+g) So, D, ED, *(1+g)-D. *(1+5)*(1+9) For constant dividend growth for "T" years, the DDM formulai Po 1+g D (1+g) k-g 1- if kg 1+k Po =TXD if k=g
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