Whatisthenamegiventothemodelthatcomputesthepresentvalueofastockbydividingnextyear'sannualdividendamountbythedifferencebetweenthediscountrateandtherateofchangeintheannualdividendamount
StockpricingmodelB
EquitypricingmodelC
CapitalgainmodelD
DividendgrowthmodelE
PresentvaluemodelRefertosection7
Bloom's:KnowledgeDifficulty:BasicLearningObjective:07-01Assesshowstockpricesdependonfuturedividendsanddividendgrowth
Section:7
1Topic:Dividendgrowthmodel2
Thedividendyieldisdefinedas:A
thecurrentannualcashdividenddividedbythecurrentmarketpricepershare
thecurrentannualcashdividenddividedbythecurrentbookvaluepershare
nextyear'sexpectedcashdividenddividedbythecurrentmarketpricepershare
nextyear'sexpectedcashdividenddividedbythecurrentbookvaluepershare
nextyear'sexp