Why is it not feasible to use the dividend discount model

Assignment Help Portfolio Management
Reference no: EM13924245

1. Discuss the reasoning behind the contention that in a completely competitive economy, there would never be a true growth company.

2. Why is it not feasible to use the dividend discount model in the valuation of true growth companies?

Reference no: EM13924245

Questions Cloud

Discuss whether you would consider a growth company : You are told that a company retains 80 percent of its earnings about 8 percent a year versus an average growth rate of 6 percent for all firms. Discuss whether you would consider this a growth company.
Draw the value function for kyle : How much would he say that he lost in terms of value when his income dropped from $15k to $11k from 2014 to 2015? Draw the value function for Kyle and identify the points corresponding to his value of $15k and $11k.
Differences between meiosis in males and females : Predict the effect on the endometrium of maintaining high progesterone levels in the circulatory system, including the period of time during which estrogen normally increases following menstruation.
Needs and wants of prospective customers : Question 1: To serve both buyers and sellers, marketing seeks to _____ and satisfy the needs and wants of prospective customers.
Why is it not feasible to use the dividend discount model : Why is it not feasible to use the dividend discount model in the valuation of true growth companies? Discuss the reasoning behind the contention that in a completely competitive economy.
Discuss the major assumptions of the growth duration model : Discuss the major assumptions of the growth duration model. What else do you need to know to properly compare the growth company to the aggregate market?
Describe a graph that would show how the frequency of g : Evolutionary biologists often compare the morphological features of different organisms to look for relationships to determine how they have changed over time. Describe a study an evolutionary biologist might carry out in determining whether two s..
What are the chemicals that were sampled : What type of sampling (personal or area) was conducted, and why? What are the chemicals that were sampled, and what are their hazards? What are the most likely routes of exposure given the nature of the business
Indicate and justify a growth label for general motors : Indicate and justify a growth label for General Motors. Given the alternative companies described in the chapter, indicate what your label would be for Walgreens. Justify your label.

Reviews

Write a Review

Portfolio Management Questions & Answers

  Portfolio analysis

The stock with the lowest beta (0.76) is Apple Inc. stock. The stock with the highest beta (3.29) is Facebook Inc. stock. Beta for Apple Inc. stock is less that 1, it tells us that stock price is less volatile and risky than mark..

  Provide investment portfolio advice

Provide investment portfolio advice and management to a client.

  Evaluate total number of shares

EBV proposes to structure the investment as 5m shares of CP with FV of $5m, one-to one conversion to common, and no dividends. Total Valuation Estimated from Newco.

  Role of the imf and world bank

Economic and territorial logic of empire are not always aligned. Explain his argument in light of the role of the IMF and World Bank as forms of neo imperialism.

  Prepare a portfolio of stocks

Prepare a portfolio of stocks

  Which critically examines the benefits and risks to company

Which critically examines the benefits and risks to a company, of incorporating corporate debt into a portfolio of equity and debt.

  Compute the variance-covariance matrix

Compute the sample mean, variance, and standard deviation of these shares and compute the variance-covariance matrix V and Plot the daily share prices and daily returns for each individual asset.

  Net nominal rate of interest and net real rate of interest

What bank portfolio can guarantee the rate of return 1 to all type 1 people and the rate of return 1.2 to all type 2 people? How many goods are placed in storage? In capital?

  Right issue to improve financial status

If you are the CEO of a British company that now faces the loss of a lucrative contract in Malaysia because of the dispute. What action should you take and How do you think British government should respond to the Malaysian action?

  Calculate the cost of reinvested profits

Calculate the cost of reinvested profits and the cost of new common shares using the constant-growth DVM - Cost of reinvested profits versus new common shares-DVM

  Calculate the after-tax cost of debt

Cost of debt For each of the following bonds, calculate the after-tax cost of debt. Assume the coupons are paid semi-annually, that the tax rate is 40 percent, and that we are dealing with $1,000 of par value.

  Calculate the overall cost of capital for cartwell products

Calculate the overall cost of capital for Cartwell Products. Which projects should the firm select? Does your answer differ from your answer topart d? If so, explain why.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd