dividend valuation model的意思|示意

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The dividend valuation model (DVM) is a method for valuing a company by equating its stock price with the discounted value of expected future dividend payments. Put simply, it allows investors and analysts to estimate the fair market value of a company's stock by applying a dividend discount rate to the company's future dividends.

A key assumption of the DVM is that investors are primarily interested in the dividend payments they receive from a company, rather than its profits or other business activities. The model therefore bases its valuation on the predicted dividend payments that the company will make in the future.

To use the DVM, investors must first estimate the future expected dividends that the company will issue. This estimate is based on the company's historical dividend payments and can be adjusted to reflect any changes in the company's dividend policy or outlook. Investors must then apply a suitable dividend discount rate based on their own risk assessment of the company. Finally, the expected dividend payments are discounted to present value to obtain an estimate of the company's fair value.

The dividend valuation model can be a useful tool for investors seeking to quickly estimate the value of a company's shares. However, it should be noted that the assumptions underlying the model may not always be accurate. Investors should also consider other valuation methods in order to build a fuller picture of a company's potential worth.