The dividend discount model provides a stock price valuation based on expected future cash flows from dividends, similarly to the DCF model. The main difference is that the cash flow/dividend growth rate is constant in the DDM model where it is not in the DCF model.
How Does the Dividend Discount Method Work?
In general, the
Category: Stock Valuation
Discounted Cash Flow or DCF for short, is a means of estimating the worth of a stock or other asset in the current moment with the use of projected cash flows. DCF is important as it reveals the amount of money that can be spent on an investment in the moment to obtain the targeted return down the line. DCF is used to cal