The Dividend Discount Model (DDM): The Black Sheep of Valuation?
Brian DeChesare
MAY 3, 2023
In our forecast, Cash rises too much, and Debt / EBITDA goes from 5.0x Dividend Discount Model, Part 4: Present Value of Terminal Value and Dividends Since the Dividend Discount Model is based on Equity Value, not Enterprise Value, the Discount Rate is the Cost of Equity: Risk-Free Rate + Equity Risk Premium * Levered Beta.
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