Dividend Discount Model : The model which is used for the evaluation of the price of the stock of the company is called the dividend discount model. The price of the stock is based on the dividend payout, rate of return and the growth rate of earnings. Shares: A Share is a term which is used to define the ownership certificates of the company. A share is that part of company’s capital which cannot further divide. Shares define the right to vote and right of participation in the profit of the company. Dividend: Shareholders have the right to participation in the profit earned by the company. That profit in the hands of shareholders is known as the Dividend. Shareholders receive the dividend on the basis of the number of shares are owned by them. To Identify: The value of the stock of Company G.

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Chapter 7, Problem 17P

Summary Introduction

Dividend Discount Model: The model which is used for the evaluation of the price of the stock of the company is called the dividend discount model. The price of the stock is based on the dividend payout, rate of return and the growth rate of earnings.

Shares: A Share is a term which is used to define the ownership certificates of the company. A share is that part of company’s capital which cannot further divide. Shares define the right to vote and right of participation in the profit of the company.

Dividend: Shareholders have the right to participation in the profit earned by the company. That profit in the hands of shareholders is known as the Dividend. Shareholders receive the dividend on the basis of the number of shares are owned by them.

To Identify: The value of the stock of Company G.

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