Meanwhile, for equity markets, we follow the Gordon growth model
The infinite series of discounted distributions simplifies to a quotient whose denominator is the difference between the discount rate and the estimated growth, identified as the Gordon Growth model
While we do not yet cover Rostelecom, if we apply a simplified approach to valuing the company's prefs, using a Gordon Growth model
, and assume a 12% discount rate and conservatively a zero growth rate for the shares' dividends, we obtain an implied value of $1.
61) based on adaptation of the Gordon Growth Model
," Global said.
52 based on DDM (80%) and adaptation of the Gordon Growth Model
Many articles extend the simplest Gordon growth model
to allow dividend growth rates to have several stages--for instance, permitting growth firms to start with high dividend growth rates and then decelerate to a stable long-run rate.
Using the Gordon Growth Model
would explain why market-derived capitalization rates are lower than might be expected.
Our valuations are based on a Gordon growth model
(GGM), with a median CoE of 11 per cent, RoAE of 20 per cent and a terminal growth rate of three per cent.
Based on our fundamental assessment of the stocks using a three-stage Gordon growth model
, we rate Halyk Bank and Bank CenterCredit (BCC) as BUYs, with estimated potential upsides of 17% and 36%, respectively.
THE TRADITIONAL INCOME APPROACH AND THE GORDON GROWTH MODEL