dividend discount model definition

dividend discount model

Mathematical formula used generally by stockbrokers to determine the selling price of a firm's stock (shares). Based on the discounted value of the expected future dividend amounts, it is used usually to spot firms that are undervalued by the stockmarket but have potential for high returns. See also dividend valuation model.

dividend discount model is in the Accounting & Auditing, Banking, Commerce & Finance, Investing and Securities & Futures Trading subjects.

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