Corporate Finance
Corporate Finance
3rd Edition
ISBN: 9780132992473
Author: Jonathan Berk, Peter DeMarzo
Publisher: Prentice Hall
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Chapter 9, Problem 4P
Summary Introduction

To determine: The expected dividend yield and equity cost of capital.

Introduction:

Dividend discounted model

It is a method of calculating company stock value; the expected value is the sum of future dividend payments, which are discounted back to their present value. In other words, stock value is based on the sum of the present value of the future dividend.

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