Open access research
publication repository

Equilibrium Dividend Growth and Stock Valuation [r-libre/1573]

Bergeron, Claude (2015). Equilibrium Dividend Growth and Stock Valuation. European Journal of Economics, Finance and Administrative Sciences, 72, 20-30.

File(s) available for this item:
[img]  PDF - sRlibreEJEFAS2015EuroJ-UK.pdf
Content : Accepted Version
Item Type: Journal Articles
Refereed: Yes
Status: Published
Abstract: In this paper, we develop a stock valuation model that takes into account the equilibrium dividend growth rate. Our development is based on the capital asset pricing model. We begin by showing that under the condition of equilibrium the expected dividend growth rate of a stock is linearly and positively related to the covariance between stock’s dividends and market dividends. We then suggest that the price of a stock is a function of its current dividend, required return, and dividend growth rate, given by the equilibrium condition. In short, our model offers an additional tool to estimate the expected dividend growth of a stock and the corresponding intrinsic value.
Official URL: http://www.europeanjournalofeconomicsfinanceandadm...
Depositor: Bergeron, Claude
Owner / Manager: Claude Bergeron
Deposited: 28 Nov 2018 18:43
Last Modified: 08 Jan 2019 21:50

Actions (login required)