dividend-growth model

dividend-growth model
A method for calculating the cost of capital for a company, using the dividends paid and likely to be paid by the company.

Accounting dictionary. 2014.

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  • Dividend growth model — A model wherein dividends are assumed to be at a constant rate in perpetuity. The New York Times Financial Glossary …   Financial and business terms

  • dividend growth model — An approach that assumes dividends grow at a constant rate in perpetuity. The value of the stock equals next year s dividends divided by the difference between the required rate of return and the assumed constant growth rate in dividends.… …   Financial and business terms

  • Dividend Discount Model - DDM — A procedure for valuing the price of a stock by using predicted dividends and discounting them back to present value. The idea is that if the value obtained from the DDM is higher than what the shares are currently trading at, then the stock is… …   Investment dictionary

  • Dividend discount model — The dividend discount model is a way of valuing a company based on the theory that a stock is worth the discounted sum of all of its future dividend payments.[1] In other words, it is used to evaluate stocks based on the net present value of the… …   Wikipedia

  • Dividend Growth Rate — The annualized percentage rate of growth that a particular stock s dividend undergoes over a period of time. The time period included in the analysis can be of any interval desired, and is calculated by using the least squares method, or by… …   Investment dictionary

  • Gordon Growth Model — A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. Given a dividend per share that is payable in one year, and the assumption that the dividend grows at a constant rate in… …   Investment dictionary

  • Constant-growth model — Also called the Gordon Shapiro model, an application of the dividend discount model which assumes (1) a fixed growth rate for future dividends and (2) a single discount rate. The New York Times Financial Glossary …   Financial and business terms

  • constant-growth model — Also called the Gordon Shapiro model, an application of the dividend discount model that assumes (1) a fixed growth rate for future dividends, and (2) a single discount rate. Bloomberg Financial Dictionary …   Financial and business terms

  • Supernormal Dividend Growth — A period of time in which the dividends issued on shares of a stock are inceasing at a higher than average rate. The high growth rate of payouts are seen as above normal, thus supernormal . Because this rate is also expected to be unsustainable,… …   Investment dictionary

  • Multistage Dividend Discount Model — An equity valuation model that builds on the Gordon growth model by applying varying growth rates to the calculation. Under the multistage model, changing growth rates are applied to different time periods. Various versions of the multistage… …   Investment dictionary

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