computingRwithGGM: Calculates Required Rate of Return using the Gordon Growth...

In stockAnalyst: Equity Valuation using Methods of Fundamental Analysis

Calculates Required Rate of Return using the Gordon Growth Model.

Description

Under the assumption of efficient prices, the Gordon growth model has been used to estimate a stock’s required rate of return, or equivalently, the market-price-implied expected return (Jerald E. Pinto, 2020).

Usage

computingRwithGGM(divN1, g, spNot)

Arguments

divN1	A number.
g	A number.
spNot	A number.

Details

According to information provided by Jerald E. Pinto (2020), the method computingRwithGGM is developed for computing Required Rate of Return using the Gordon Growth Model for the values passed to its three arguments. Here, divN1 is dollar value of the dividend in one year, g is dividend growth rate, and spNot is current share price.

Value

Input values to three arguments divN1 , g and spNot.

Author(s)

MaheshP Kumar, [e-mail]

References

Pinto, J. E. (2020). Equity Asset Valuation (4th ed.). Wiley Professional Development (P&T). https://bookshelf.vitalsource.com/books/9781119628194

Examples

computingRwithGGM(divN1=2.363,g=0.055,spNot=56.60)

stockAnalyst documentation built on Sept. 13, 2022, 5:07 p.m.