Dividend Discount Model DDM Explained with Examples.

The dividend discount model (DDM) is a quantitative method used for predicting the price of a company's stock. The dividend discount model (DDM) is based on the theory that its present-day price is worth the sum of all of its future dividend payments when discounted back to their present value.
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[@Lutz9001]

Greetings Prof. Farhat, The final example asks for the dividend yield. @22:30 Isn't the dividend yield technically a function of the current dividend over the current price? (i.e. we should take D1/P1) So we would have to solve 2.15/59.77 for a yield of 3.59%? Of course, to calculate our holding period return, we would substitute in our purchase price of 53.75 and then calculate 2.15/53.75 as show in the video to find our dividend based return of 4% as shown in the video?

[@onabizzz]

Hello Prof. Farhat, At 20:31, shouldn't we gross up the $2.15 by the 11.2% growth rate first, thus the numerator would have been $2.39?

[@Kamaleido02]

no because its already given as d1