Exercise 7 question
In subsequent block of questions, in question 7 shouldn't we multiply payout ratio on (1 + dividend growth rate)?
2 answers ( 0 marked as helpful)
Hello Ruslan,
Thanks for reaching out!
Can you please tell me which question are you referring to. The one that your screenshot is about is not about multiplying the payout ratio.
Please elaborate further.
Best,
The 365 Team
Thanks for reaching out!
Can you please tell me which question are you referring to. The one that your screenshot is about is not about multiplying the payout ratio.
Please elaborate further.
Best,
The 365 Team
Hello, Ivan,
I mean, to find P/E according to GGM shouldn't we use the formula p * (1 + g) / (r - g)? To find the price of a share in the numerator we need to use dividends of the first period, that is D0 * (1 + g). We divide both parts of the equation by E and get P/E on the left and p * (1 + g) on the right, don't we?
I mean, to find P/E according to GGM shouldn't we use the formula p * (1 + g) / (r - g)? To find the price of a share in the numerator we need to use dividends of the first period, that is D0 * (1 + g). We divide both parts of the equation by E and get P/E on the left and p * (1 + g) on the right, don't we?