Or if we moderate the 13% growth rate to a modest 9% and still use the 10% discount rate the answer is $8.50 - YIPPEE
Looking at the 'investorwords' example, in all cases the growth in the company's dividends is less than the company's cost of equity capital. So your overoptimistic inputs Winner, with a discount rate less than the divdend growth rate, are apparently, not allowed.
SNOOPY
Last edited by Snoopy; 10-02-2017 at 04:14 PM.
Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7
Looking at the 'investorwords' example, in all cases the growth in the company's dividends is less than the company's cost of equity capital. So your overoptimistic inputs Winner, with a discount rate less than the divdend growth rate, are apparently, not allowed.
SNOOPY
So the model is nonsense then
Working backwards from a 155 share price and using my 13% growth rate the implied discount rate is 18.5%
Hmmm
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
Snoopy I am sure it will not surprise you that I think they can grow dividends in line with EPS growth. Consensus analyst forecast on 4traders is for meaningful growth in EPS for the next 3 years and I am happy with their figures.
May I suggest you rework the dividend valuation model using average brokers consensus EPS growth figures for the next 3 years.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
LOL this hound feels like biting a chunk out of the other hound after reading that then the Tiger could give him a good clawing and send him back to his kennel in disgrace
Honestly to suggest this company can't grow dividends going forward is in my opinion a seriously flawed viewpoint. Far more likely that housing will continue to maintain close to its real current value and UDC will continue to do what its always done. Doomsday thinking way overdone Snooper.
Last edited by Beagle; 10-02-2017 at 05:01 PM.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
Originally Posted by winner69
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