Quote Originally Posted by KiwiGreen View Post
Anyone done a dividend discount model for Chorus? First time I've done one, seems very simple but just want to check my accuracy.

In line with the EY report I've forecast no divi for 2014 or 15, then 12.75c from 2016 to 2020. Then 25c from 2021 on wards in perpetuity (not mentioned in report) growing at 2.5% pa. Used a discount rate of 10% and got a current value (SP) of NZ$2.11.

Feedback appreciated.
Questions rather than feedback:

- Does your model account for imputation credits. As a solely NZ company, their dividends should be fully imputed.
- why did you choose 25c from 2021. How much does a lower figure of say 20c impact the valuation.