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Constant Growth (Gordon) Model

Weighted Average Cost of Capital (WACC) Gordon Model is used to determine the current price of a security. The Gordon model assumes that the current price of a security will be affected by the dividends, the growth rate of the dividends, and the required rate of return by shareholders. Use the Gordon Model Calculator below […]

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Walters Dividend Model

Walters model supports the principle that dividends are relevant. The investment policy of a firm cannot be separated from its dividend policy and both are inter-related. The choice of an appropriate dividend policy affects the value of an enterprise. Retained earnings are the only source of finance. This means that the company does not rely […]

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51e Gordon Growth Model

Assuming the growth rate of a stock and the growth rate of its dividends are constant, Value  = (Dividend) /(stock growth rate – dividend growth rate) 1. how did they get that simplified formula? I was trying to add each individual year out to infinity to get an idea. Any mathematicians know how to do […]

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Investing for Beginners

Owning equity in a company means that you own all or part of it. The owners equity account is listed on the balance sheet for accounting purposes. There are a few reasons for a decrease in owners equity. Net income is the portion of a companys revenues that remains after it pays all expenses. Owners […]

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How to Use the Gordon Growth Model

. The model is named after finance professor Myron Gordon and first appeared in his article Dividends,Prices, which was published in the 1959 edition of [Click here to read aboutDiscount Model.] The GGM is mainly applied to value mature companies that are expected to grow at the same rate forever. The Gordon growth model, like […]

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PE Ratios

statistic that relates the price paid to current earnings. it issimple to computefor most stocks, and is widely available, making comparisons across stocks simple. it is aproxy for a number of other characteristicsof the firm including risk and growth. use of PE ratios is a way, for some analysts, toavoid having to be explicit about […]

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Dividend policy

is concerned with financial policies regarding payingcash dividendin the present or paying an increased dividend at a later stage. Whether to issue dividends, and what amount, is determined mainly on the basis of the companys unappropriated profit (excess cash) and influenced by the companys long-term earning power. When cash surplus exists and is not needed […]

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Management Study Guide

Management Study Guide is a complete tutorial for management students, where students can learn the basics as well as advanced concepts related to management and its related subjects. Management Study GuidePrivacy Policy

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Mortgage Formulas

Interest Rate – David Cantrell Method Future Value for Single Present Value Auto Loan EMI (Equated Monthly Installment) Refinance Break Even Point Calculator Required Rate of Return – Gordon Growth Model Annual Payment based on Future Value Price Increase, Decrease Percentage Sales Funnel to Find Conversion Rate Present Value of Growing Perpetuity Annual Payment based […]