Question: Dividend data: ABF : $0.35 You can use the nearest dividend as D1 in the constant growth DDM. What is the average growth rate for
Dividend data:
ABF : $0.35
You can use the nearest dividend as D1 in the constant growth DDM.
What is the average growth rate for ABF:LSE? calculate from: (D1-D0)/D0 = (the nearest forecast recent paid dividend)/recent paid dividend.
You finally need the required rate of return k, which can be calculated from the single index model as described in 1-b Single index model above. You can then find the intrinsic value of the stock assuming constant growth DDM.
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