Re: How To Prove The Validity Of Dividend Discount H Model

• To: mathgroup at smc.vnet.net
• Subject: [mg50772] Re: How To Prove The Validity Of Dividend Discount H Model
• From: cskoh001 at yahoo.com.sg (kcs)
• Date: Sun, 19 Sep 2004 21:39:34 -0400 (EDT)
• References: <9ouhfg\$19q\$1@smc.vnet.net>
• Sender: owner-wri-mathgroup at wolfram.com

```Hmm....this reply comes 3 years late. But i believe you can find your

Fuller and Hsia [`A Simplified Common Stock Valuation Model? Financial
Analysts? Journal Sept-Oct 1984 p49-56]

On Thu, 27 Sep 2001 06:37:36 +0000 (UTC), @Paul wrote:
>Hi,
>I am studying for the financial analysis course. I have no problems
with the
>Gordon Growth Model & The Two- Stage Dividend Discount Model.
>
>But, I have difficulty proving the equation form of the H model:
>
>Value per share = DPS0(1 + g2) / (r - g2)
>                               + DPS0 * H (g1 - g2) / (r - g2)
>
>This model assumes that the initial high growth rate (g1) will
decline
>linearly to the stable growth rate (g2). The high growth period is
assumed
>to last for 2H years. Thereafter, the dividends grow at a constant
rate g2
>forever. DPS0 is the dividend at time 0.
>
>Any help from anyone is much appreciated. Thanks.
>
>Julie

```

• Prev by Date: Re: Newbie Plot Question
• Next by Date: Re: Forcing a Derivative
• Previous by thread: Mathematica For Dummies
• Next by thread: mysql-mlink anyone? I need to make it run under Mac OS X