HowtoValueBondsandStocks幻灯片.pptVIP

5.7 The Dividend Growth Model and the NPVGO Model (Advanced) We have two ways to value a stock: The dividend discount model. The price of a share of stock can be calculated as the sum of its price as a cash cow plus the per-share value of its growth opportunities. The Dividend Growth Model and the NPVGO Model Consider a firm that has EPS of $5 at the end of the first year, a dividend-payout ratio of 30%, a discount rate of 16-percent, and a return on retained earnings of 20-percent. The dividend at year one will be $5 × .30 = $1.50 per share. The retention ratio is .70 ( = 1 -.30) implyi