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The result of the move request was: page moved. Vegaswikian ( talk) 21:43, 20 October 2011 (UTC)
Dividend Discount Model → Dividend discount model –
Per WP:CAPS ("Wikipedia avoids unnecessary capitalization") and WP:TITLE, this is a generic, common term, not a propriety or commercial term, so the article title should be downcased. Lowercase will match the formatting of related article titles, including the "See also" Gordon model. Tony (talk) 02:55, 14 October 2011 (UTC)
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IN the beginning of the page you have the dividend express as D0(1+g). then suddenly in the section entitled "Income plus capital gains..." the equation changes to simply " D " . ???-- Roxette5 ( talk) 11:34, 26 October 2017 (UTC)
You don't understand this model. There is no D0(1+g). The correct derivation:
P0 = D1/(1+r) + D1*(1+g)/(1+r)^2 + D1*(1+g)^2/(1+r)^3 + ... ,
where
P0 - the present intrinsic stock value (at t = 0)
D1 - a dividend in the next period (so at t = 1)
r - cost of equity
g - growth rate
D1/(1+r) + D1*(1+g)/(1+r)^2 + D1*(1+g)^2/(1+r)^3 + ... =
= 1/(1+r) [D1 + D1*(1+g)/(1+r) + D1*(1+g)^2/(1+r)^2 + ... ] =
= 1/(1+r) * A , where
A = D1 + D1*(1+g)/(1+r) + D1*(1+g)^2/(1+r)^2 + ...
We use Geometric series - Wikipedia so that for r < 1:
A = D1 / [1 - (1+g)/(1+r) ] = D1*(1+r) / (r - g)
Then we go back to P0:
P0 = 1/(1+r) * A = 1/(1+r) * D1*(1+r) / (r - g) = D1 / (r - g)
So you see that I don't use the present dividend and only start from t = 1 and D1. That means that Gordon's model is more flexible than you assume. Pawel.jamiolkowski ( talk) 19:35, 10 June 2024 (UTC)
1) The equations related to Gordon's constant growth DDM lack inline citations to reliable sources. 2) Related Methods has no inline citations to reliable sources. 3) Related Methods does not state that the DCF formula includes the expected sales price of the stock at the end of the holding period. Intrinsic value of a stock = PV of future dividends + expected sales price of stock at end of holding period. This is explained in the "Dividend Discount Models" section of the university textbook Essentials of Investments, so it belongs here too. I can handle #3. Cordially, BuzzWeiser196 ( talk) 13:44, 21 July 2024 (UTC)
Greetings Wikipedians! This violates Wikipedia's policy on verifiability, which states: "Even if you are sure something is true, it must be verifiable before you can add it....The burden to demonstrate verifiability lies with the editor who adds or restores material, and it is satisfied by providing an inline citation to a reliable source that directly supports the contribution." The lack of citations for all those equations is particularly troubling. Give us the sources! I'll let this rest for a while and hope someone will rectify this shortcoming. Cordially, BuzzWeiser196 ( talk) 13:07, 14 July 2024 (UTC)
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talk page for discussing improvements to the
Dividend discount model article. This is not a forum for general discussion of the article's subject. |
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The result of the move request was: page moved. Vegaswikian ( talk) 21:43, 20 October 2011 (UTC)
Dividend Discount Model → Dividend discount model –
Per WP:CAPS ("Wikipedia avoids unnecessary capitalization") and WP:TITLE, this is a generic, common term, not a propriety or commercial term, so the article title should be downcased. Lowercase will match the formatting of related article titles, including the "See also" Gordon model. Tony (talk) 02:55, 14 October 2011 (UTC)
Hello fellow Wikipedians,
I have just modified one external link on Dividend discount model. Please take a moment to review my edit. If you have any questions, or need the bot to ignore the links, or the page altogether, please visit this simple FaQ for additional information. I made the following changes:
When you have finished reviewing my changes, you may follow the instructions on the template below to fix any issues with the URLs.
This message was posted before February 2018.
After February 2018, "External links modified" talk page sections are no longer generated or monitored by InternetArchiveBot. No special action is required regarding these talk page notices, other than
regular verification using the archive tool instructions below. Editors
have permission to delete these "External links modified" talk page sections if they want to de-clutter talk pages, but see the
RfC before doing mass systematic removals. This message is updated dynamically through the template {{
source check}}
(last update: 5 June 2024).
Cheers.— InternetArchiveBot ( Report bug) 14:40, 11 September 2017 (UTC)
IN the beginning of the page you have the dividend express as D0(1+g). then suddenly in the section entitled "Income plus capital gains..." the equation changes to simply " D " . ???-- Roxette5 ( talk) 11:34, 26 October 2017 (UTC)
You don't understand this model. There is no D0(1+g). The correct derivation:
P0 = D1/(1+r) + D1*(1+g)/(1+r)^2 + D1*(1+g)^2/(1+r)^3 + ... ,
where
P0 - the present intrinsic stock value (at t = 0)
D1 - a dividend in the next period (so at t = 1)
r - cost of equity
g - growth rate
D1/(1+r) + D1*(1+g)/(1+r)^2 + D1*(1+g)^2/(1+r)^3 + ... =
= 1/(1+r) [D1 + D1*(1+g)/(1+r) + D1*(1+g)^2/(1+r)^2 + ... ] =
= 1/(1+r) * A , where
A = D1 + D1*(1+g)/(1+r) + D1*(1+g)^2/(1+r)^2 + ...
We use Geometric series - Wikipedia so that for r < 1:
A = D1 / [1 - (1+g)/(1+r) ] = D1*(1+r) / (r - g)
Then we go back to P0:
P0 = 1/(1+r) * A = 1/(1+r) * D1*(1+r) / (r - g) = D1 / (r - g)
So you see that I don't use the present dividend and only start from t = 1 and D1. That means that Gordon's model is more flexible than you assume. Pawel.jamiolkowski ( talk) 19:35, 10 June 2024 (UTC)
1) The equations related to Gordon's constant growth DDM lack inline citations to reliable sources. 2) Related Methods has no inline citations to reliable sources. 3) Related Methods does not state that the DCF formula includes the expected sales price of the stock at the end of the holding period. Intrinsic value of a stock = PV of future dividends + expected sales price of stock at end of holding period. This is explained in the "Dividend Discount Models" section of the university textbook Essentials of Investments, so it belongs here too. I can handle #3. Cordially, BuzzWeiser196 ( talk) 13:44, 21 July 2024 (UTC)
Greetings Wikipedians! This violates Wikipedia's policy on verifiability, which states: "Even if you are sure something is true, it must be verifiable before you can add it....The burden to demonstrate verifiability lies with the editor who adds or restores material, and it is satisfied by providing an inline citation to a reliable source that directly supports the contribution." The lack of citations for all those equations is particularly troubling. Give us the sources! I'll let this rest for a while and hope someone will rectify this shortcoming. Cordially, BuzzWeiser196 ( talk) 13:07, 14 July 2024 (UTC)