You have been asked to perform a stock valuation prior to the annual shareholders meeting next week. The two
models you have selected to value the firm are the dividend discount model and the discounted cash flow model. Explain why the estimates from the two valuation methods differ. Address the assumptions implicit in the models themselves as well as those you made during the valuation process.
The dividend discount model assumes that the sum of all future dividend payments discounted at their present values is equal... View the full answer