ddm: Dividend Discount Model (Gordon Growth Model)

In maximilian-muecke/firmValueSim: A Simulation Approach for Company Valuations

Dividend Discount Model (Gordon Growth Model)

Description

ddm() calculates the company stock price based on the dividend discount model. The dividend discount model is a method of valuing the stock price of a company based on the future dividend payments it will make, discounted back to their present value.

Usage

ddm(d, r, g)

Arguments

d	Numeric. Estimated value of dividend in the next year.
r	Numeric. Constant cost of equity.
g	Numeric. Constant growth rate for dividends in perpetuity.

Value

The estimated price per share.

References

Gordon, M. J. (1959). Dividends, earnings, and stock prices. The review of economics and statistics, 99-105.ISO 690

Examples

stock_price <- ddm(1.5, 0.05, 0.03)

maximilian-muecke/firmValueSim documentation built on Oct. 2, 2022, 5:40 p.m.