Explain why an individual might not be convinced to make a buy/sell decision based on the Gordon growth model (also known as the dividend discount model). Support your rationale with at least one citation from the literature.

Explain why an individual might not be convinced to make a buy/sell decision based on the Gordon growth model (also known as the dividend discount model). Support your rationale with at least one citation from the literature.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter15: Distributions To Shareholders: Dividends And Repurchases

Section: Chapter Questions

Problem 4Q: One position expressed in the financial literature is that firms set their dividends as a residual...

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Definition Definition Quantifiable approach used to anticipate the stock price of a company by discounting all of its future dividend payments. According to this model, the present value of the stock is worth the sum of discounted future dividend payments and the intrinsic value of the stock.

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