Skip to content

Constant Growth Rate Model

July 19, 2012
  • Vj = D1 / (k – g)
  • Vj = value of the stock J
  • D1 = Current Dividend times (1 + g) = D0 * (1 + g)
  • k = The required rate of return
  • g = The constant growth rate of dividends
  • g = ROE * (1 – dividend payout ratio)
Advertisements

From → Asset Valuation

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: