Remove Dividends Remove Marketability Remove Risk Premium Remove Terminal Value
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The Dividend Discount Model (DDM): The Black Sheep of Valuation?

Brian DeChesare

When I started offering financial modeling training , I never expected to get questions about a methodology like the Dividend Discount Model (DDM). Otherwise, the written version follows: Why Use a Dividend Discount Model? If you sum up these numbers, you can see whether the company is valued appropriately.

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Mercer’s Musings #4: Factors to Consider in Valuing Partial Ownership Interests

Chris Mercer

The second and third musings address the issue of marketability discounts and conclude that it is not possible to comply with any valuation standards, whether USPAP or not, using only averages of restricted stock studies as a basis for “guessing” marketability discounts. The relevant pool of potential buyers, if any.