Three-phase DDM(redirected from Three Phase Dividend Discount Model)
A version of the dividend discount model that applies a different expected dividend rate depending on a company's life-cycle phase: growth phase, transition phase, or maturity phase.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
A form of the dividend discount model that divides a company into three phases. A dividend discount model is a calculation of the value of a publicly-traded company's common stock based on the present value of its future dividends. The three-phase DDM assumes that a company's dividend policy is determined by one of three phases: a growth phase, a transition phase, and a maturity phase. The company's goals differ in each phase and its dividend policy changes accordingly. The three-phase DDM attempts to account for this in its calculation.
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