The dividend discount model (DDM) is one of the basic applications of financial theory. The theory is easy to grasp: A stock is worth its price if that price is less than the net present value of ...

DDM or dividend discount model is a quantitative method to predict the price of company stock. It is based on the theory that the current price of a company’s stock is equal to the sum of all ...

Several stock valuation models exist, such as dividend discount models, one of which is the Gordon growth model. While a stock price is conceptually determined by its expected future dividends ...

The company must pay a dividend to use this model and that dividend must grow at a regular rate over the long term. The discount rate must also be higher than the dividend growth rate for the ...

We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws.

Using a dividend discount model for valuation, the stock appears undervalued by 25% to 35%. The company's strategic growth initiatives, attractive dividend, and robust share repurchase plan policy ...