CAPM and the Constant Dividend Growth Model

******** **

****** *** ******** dividend growth ***** ***** ***** assumes **** *** ******** growth **** ** ***** and ****** ******* ***** ******* ***** (CAPM) ***** **** account the ***** ** systematic risk vis-à-vis *** stock market ** * ************* CAPM ********** ************ **** unlike *** ***** assumes that ***** ***** ** hypersensitive *** that the ******** ****** **** ****** be ****** **** the cost ** ****** (Thomas ***** *** ***** *** ******* ****** ********** thus ****** ** ****** ** ******* different companies whereas **** uses ******** ******* ****** ******* ***** *** ** inaccurate ** ********** ****** ****** ******* ************ CAPM’s ******* ********** ** ********* *** ******* ** * ********* rate ***** *** minimum ******** return ********** because ********* ****** ****** or **** ** the **** **** ** *** government ****** *** ******* ********** **** and non-dividend ******* ***** *** ************* ******** *** value ** * **** ***** **** ***** ***** ******* **** ******* ********** ***** ***** ******

******** **

DGM ****** ** used to ***** the stock of ***** *** because *** ******* **** *** *** ********* and *** ****** ** dividend ******** ** estimate ***** ***** **** ** *** ***** hand can ** **** to ***** the stock ** **** ******* but it ***** ******* ************ ** **** **** account ***** ***** ******* **************** risk *** ******** **** ******* ************ ** use **** in **** case would ******* combining ** **** *** ********** ****** ********* ****** ******* ** * ******* **** Gamma’s stock is *** ****** thus there *** no **** ****** *** ***** **** ** ******** * discount rate ** *********** *** ***** of ****** **** *** ******* ** ********** ***** default risk ********* **** ** **** *** **** ***** *** lack ** ************ ** ********* held companies **** ** difficult ** accurately value them and **** when ***** **** one *** ** **** ** ******** averages assumptions *** ********* ******* ***** *** ******

******** **

*** ********* models for *********** the ***** ** a ***** cannot ** ******** used ** **** day ** *** investment ********* ** *** ***** market because **** have many shortcomings The ********* ** ***** ****** *** * product ** **** ***** estimates *** assumptions thus *** ***** value one arrives at using these ****** *** ** **** ***** estimates ***** ** ** ******* ***** ********* ***** ** **** ***** situation and using ********* ****** can yield *********** ****** ****** ** ********* ** ****** which result *** should *** ************ ***** ********* models **** ** **** **** ******* ***** ************ ** ***** market prices **** ** investor ********* and the ****** ** **** events ** stock ************ ******* ******* * stock is **** ** *********** ****** ** ** accurate **** *** *** ** *** ********** *************** since ***** *** several other factors **** *** *** to assess ****** deciding ***** ***** ***** their ********** needs ********** ***** ***** ******

References

*********

* ***** Smart S (2011) ************ ** corporate ******* ****** **** South-Western

******* Learning
******

* & *** * * ****** The ********* ********* ********* techniques from
today’s

*** ************* ******* *** John ***** & ****

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