Deriving the Dividend Discount Model in the Intermediate Microeconomics Class Stephen Norman Jonathan Schlaudraff Karianne White Douglas Wills* May 2012 Abstract This paper shows that the dividend discount model can be derived using the basic intertemporal consumption model that is introduced in a typical intermediate microeconomic course. This result will be of use to instructors who teach microeconomics to finance students in that it demonstrates the value of utility maximization in obtaining
Premium Economics
Dividend discount model Dividend discount model (DDM) is a way of valuing a share based on the net present value of the dividends that you expect to receive in the future. According to the DDM‚ dividends are the cash flows that are returned to the shareholder. FY 2002 2003 2004 2005 2006 2007F 2008F 2009F Share price 0.155 0.150 0.230 0.370 0.450 0.450 Dividends per share 0.005 0.012 0.014 0.012 0.013 0.019 0.0178 0.020 Dividend Growth 0.0833 0.258 0.014 0.014 Dividend rates are expected
Premium Net present value Investment Stock market
These patterns are learned from parents‚ teachers‚ peers‚ and the larger society – what can be considered “the traditional culture.” In addition‚ generational values‚ attitudes‚ beliefs‚ and behaviors are becoming as commonly accepted and increasingly talked about as a sub-culture‚ better known as “The Generational Culture.” In some cases the two cultures work together well. However‚ in other situations challenges arise‚ resulting in a conundrum for those interested in behavior change such as leaders
Premium Sociology Culture The Culture
Hertz purchases the fleet from GM for $325‚000‚ and Hertz is able to issue $200‚000 of five year‚ 8% debt in order to finance the project. All principal will be repaid in one balloon payment at the end of the fifth year. What is the Adjusted Present Value (APV) of the project? 17.1 a. The maximum price that Hertz should be willing to pay for the fleet of cars with all-equity funding is the price that makes the NPV of the transaction equal to zero. NPV = -Purchase Price + PV[(1- TC
Premium Depreciation Finance Net present value
Horizontal Analysis Horizontal analysis is a procedure in fundamental analysis in which compares ratios or line items in a company’s financial statements over a certain period of time. The horizontal analysis of Marriott International is shown below. | 2010 | 2009 | 2008 | Increase/(Decrease)Amount Percent | Revenue | $11‚691 | $10‚908 | $12‚879 | $(1‚188) | 9.2% | Expenses | $10‚996 | $11‚060 | $12‚114 | $(1‚118) | 9.2% | Operating income | $695 | $(152) | $765 | $(70) | 9.1% | Net
Premium Income statement Generally Accepted Accounting Principles Revenue
Christian Benavidez Mr. E Everett AP Eng. IV 28 September 2012 Comparison of the Past and the Present Culture Values: Heroes and Villains Then and Now All values change over time; some are slower such as Cultural values that are learned behavior patterns that can continue to change thorough time. The view for cultural values today are different from than what they were centuries ago; in today’s view for a hero would be simply a normal person in the modern era who is distinguished by nobility
Premium Beowulf Denmark Culture
To spank or not to spank‚ where do you draw the line? How do you discipline your children? Do you think it’s okay to discipline them by spanking them? Parents use discipline to teach their children the difference between right and wrong. What is right and what is wrong? Ninety percent of parent thinks that the only way to deal with misbehaving children is to give them a smack. "The American Academy of Pediatricians say that spanking might actually do more harm than good"‚ meaning that the spanking
Premium Spanking Family Corporal punishment
McGregor grouped employees hierarchy need into lower-order needs (Theory X) and higher-order needs (Theory Y)‚ and opined that “these two opposing perceptions conjectured how people view human behavior at work and organizational life” (Wambugu‚ 2014). For instance‚ Theory X assumed that management’s role in the organization is to pressurize and control employees to perform based on the insinuation that human beings are pressure
Premium United States Department of Homeland Security United States Coast Guard Security
between 30 cm and 32 cm‚ as well as 37 cm and 38 cm. All of the athletes’ vertical leaps were higher than 25 cm. This data displayed an inverse linear relationship between the leap and calf size; a best fit line could be drawn. The t-test produced a mean value of 30.2 +/- 4.2 cm. The non athletic participants’ data showed that the calf sizes varied‚ and the height of the vertical leaps tended to be lower than the athletes. The vertical leaps for the non athletes typically reached a 25 cm height or lower
Premium Experiment Chemistry Science
The Importance of The Discount Rate during Financial Crises and its Effectiveness in Targeting a Given Interbank Lending Rate In this essay I will briefly describe supply and demand for reserves in the economy to provide some context to the discount window before discussing the implementation of the discount window during the financial crisis of 2007-8 and its overall importance making specific reference to the Federal Reserve and its effect on the interbank lending rate. Firstly‚ I will outline
Free Monetary policy Federal Reserve System Central bank