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Normative Stock Price Models
Published online by Cambridge University Press: 19 October 2009
Extract
All the stock price models discussed in this paper are based on the assumption that the present value of a share of common stock is equal to the discounted value of all future expected dividends accruing to the stockholder:
where Po : current value of a share of common stock,
Dt: dividend expected to be received at end of period t,
k : investor's discount or time-value rate, and
t : time.
- Type
- Research Article
- Information
- Journal of Financial and Quantitative Analysis , Volume 6 , Issue 4 , September 1971 , pp. 1135 - 1144
- Copyright
- Copyright © School of Business Administration, University of Washington 1971
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