Gordon's Growth Model - Introduction and Formula скачать в хорошем качестве

Gordon's Growth Model - Introduction and Formula

Explanation in EASYWAY!!!!! Walter's Model - Introduction -    • Walter's Model - Introduction -  Dividend ...   Walter's Model Practical Question :-    • Walter's Model -  Pratical Question   Gordon’s Growth Model is also known as Dividend Growth Capitalization Model. This model clearly relates that market value of the firm to dividend policy. The share price of company is nothing but CURRENT and FUTURE DIVIDEND. Assumptions :- The firm is an all-equity firm; only the retained earnings are used to finance the investments, no external source of financing is used. The rate of return (r) and cost of capital (K), Retention ratio , Growth rate are constant. The life of a firm is indefinite. Cost of Capital is greater than Growth Rate. Formula :- Present Value of Market Price Per Share = E(1-b) / K- br E =Earning Per Share b = Retention Ratio K = Cost of Capital r = Internal Rate of Return