CMA Study Group

 View Only
  • 1.  Dividend growth model

    Posted 04-13-2014 11:12 AM
    Dear team,

    Could you please explain the key point of "when the present value of the future cash flows equals the market price, the discount rate equals the cost of equity capital. An underlying assumption is that cash flows will grow at a constant compound rate."?



    -------------------------------------------
    Ganesan Sivalingam
    Accountant
    Sharqiyah Desalination Co SAOG
    Muscat
    Oman
    -------------------------------------------