Even when g is very close to r, P approaches infinity, so the model becomes meaningless. ==Some properties of the model== ==Problems with the model== a) The presumption of a steady and perpetual growth rate less than the cost of capital may not be reasonable. b) If the stock does not currently pay a dividend, like many growth stocks, more general ...
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http://en.wikipedia.org/wiki/Dividend_discount_model
A financial model that values shares at the discounted value of future dividend payments. This is theoretically the most correct way of valuing shares....
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http://moneyterms.co.uk/d/
A model for determining the price of a security based on the discounted value of its projected future dividend payments. These models are very sensitive to interest rates.
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http://www.encyclo.co.uk/local/20174
A way of valuing a share based on the net present value of the dividends that you expect to... <a target=_blank href='http://www.finance-glossary.com/terms/dividend-discount-model.htm?id=1802&ginPtrCode=00000&PopupMode=false' title='Read full definition of dividend discount model'>more</a>
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The dividend discount model, or DDM, is a method of valuing a stock on the basis of present value of its expected dividends. The model discounts the expected future dividends to the present value, thereby estimating if a share is overvalued or undervalued.
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https://www.myaccountingcourse.com/accounting-dictionary/accounting-diction
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