Description Usage Arguments Details Value Author(s) References Examples

This function computes the intrinsic stock price using the constant growth dividend discount model.

1 2 |

`dividend` |
expected dividend(s) for the next year(s) (in euros), separated by commas |

`k` |
required rate of return |

`g` |
growth rate of dividends |

`ROE` |
return on investment |

`b` |
plowback ratio |

`riskFree` |
riskfree rate |

`marketPremium` |
market risk premium |

`beta` |
beta |

All the above rates are given in percentages (except the dividends). One should provide either k or the following three: riskFree, marketPremium, beta. Further, one should provide either g or the following two: ROE and b. In the output, k and g are given in decimals.

`dividend` |
expected dividend(s) for the next year(s) (in euros) |

`k` |
required rate of return |

`g` |
growth rate of dividends |

`PVGO` |
present value of growths opportunities |

`stockPrice` |
intrinsic stock price |

Arto Luoma <arto.luoma@wippies.com>

Bodie, Kane, and Marcus (2014) *Investments, 10th Global Edition*, McGraw-Hill Education, (see Dividend Discount Models in Section 18.3).

1 2 3 | ```
stock.price(dividend=c(1),k=12,g=10)
stock.price(dividend=c(1),ROE=50,b=20,riskFree=5,marketPremium=8,
beta=90)
``` |

```
Loading required package: rgl
Loading required package: demography
Loading required package: forecast
This is demography 1.22
Warning messages:
1: In rgl.init(initValue, onlyNULL) : RGL: unable to open X11 display
2: 'rgl_init' failed, running with rgl.useNULL = TRUE
3: .onUnload failed in unloadNamespace() for 'rgl', details:
call: fun(...)
error: object 'rgl_quit' not found
4: no DISPLAY variable so Tk is not available
$dividend
[1] 1
$k
[1] 0.12
$g
[1] 0.1
$PVGO
[1] NA
$stockPrice
[1] 50
$dividend
[1] 1
$k
[1] 0.122
$g
[1] 0.1
$PVGO
[1] 35.20864
$stockPrice
[1] 45.45455
```

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