vv-13 - Gordon model Vo = D1/(kcs g) where D1 = Do(1+g) Two...

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Ch. 7 Equity Difference between debt (chapter 6) and equity (chapter 7)? Fixed income vs. residual claim. Preferred stock – hybrid security. Vps = D/kps Common stock Single holding period return Capital gains + Dividend if in $. Capital gains yield + dividend yield if in %. Projected dividend + stock price in the future discounted back to today is Vo or intrinsic value.
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Unformatted text preview: Gordon model Vo = D1/(kcs g) where D1 = Do(1+g) Two stage growth model: Stage 1-? Individual growth rates discounted back. Last stage Gordon model. Known as terminal value. If dividends arent available as in Google box, go with FCF instead. Can solve for any of the missing variables. Citigroup case at the back of the chapter....
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This note was uploaded on 04/07/2011 for the course BUS M 301 taught by Professor Jimbrau during the Winter '11 term at BYU.

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