Advanced Dividend Valuation
Interactive

Advanced Dividend Valuation

Intuition Publishing Pty Ltd
Updated Sep 23, 2020

One of the most important (and advanced) dividend models for stock valuation is the two-stage DDM. In the model, the first stage consists of several years of fast dividend growth while the second stage assumes a lower dividend growth rate. This second rate is used to forecast a long-term (terminal) value for the stock. Here we explore the two-stage dividend discount model and provide examples of how it is used to determine the fair price of a stock.

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