Complete Beginner’s Guide to Dividend Growth Models
Valuing of your dividends can be easily achieved with the use of dividend discount models. You can choose from a variety of models that will suit you best.
First, let’s discuss what exactly is a dividend growth model or also known as a dividend discount model.
What is a Dividend Discount Model The dividend discount model is also most commonly referred to as DDM. It is a procedure for valuing the price of a stock through the use of predicted dividends and then discounting them back to the present value. The value you obtain from this calculation will help you determine whether the stock is overvalued or undervalued.
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