|Dividend growth model|
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Definition of Dividend growth model
Dividend growth model
A model wherein dividends are assumed to be at a constant rate in perpetuity.
Version of the dividend discount model in which dividends grow at a constant rate.
Yield curve option-pricing models.
A model for determining the required rate of return on an asset.
A model, such as the Capital Asset Pricing model (CAPM), that determines the required
A method of pricing options or other equity derivatives in
An option pricing model in which the underlying asset can take on only two
The first complete mathematical model for pricing
A model for pricing call options based on arbitrage arguments that uses
An economic theory that describes the relationship between risk and
A model for estimating equilibrium rates of return and values of
Theory of the relationship between risk and return which states that the expected risk
A dividend paid in cash to a company's shareholders. The amount is normally based on
Payment of cash by the firm to its shareholders.
Also called the Gordon-Shapiro model, an application of the dividend discount
Times in a company's history when growth is essential and without which survival of the business might be in jeopardy.
Cumulative dividend feature
A requirement that any missed preferred or preference stock dividends be paid
Liability-matching models that assume that the liability payments and the asset cash
Discounted dividend model (DDM)
A formula to estimate the intrinsic value of a firm by figuring the
A dividend is a portion of a company's profit paid to common and preferred shareholders. A stock
A payment a company makes to stockholders. Earnings before income tax. The profit a company made
The payment of after-tax profits to shareholders as their share of the profits of the business for an accounting period.
A payment made to shareholders that is proportional to the number of shares
Periodic cash distribution from the firm to its shareholders.
As the term dividend relates to a corporation's earnings, a dividend is an amount paid per share from a corporation's after tax profits. Depending on the type of share, it may or may not have the right to earn any dividends and corporations may reduce or even suspend dividend payments if they are not doing well. Some dividends are paid in the form of additional shares of the corporation. dividends paid by Canadian corporations qualify for the dividend tax credit and are taxed at lower rates than other income.
Unlike dividends which are paid to company shareholders, participating insurance policy dividends are not based on the company's overall profits. Rather, they are determined by grouping policies by type and country of issue and looking at how each class contributes to the company's earnings and surplus.
With respect to a project financing, an arrangement under which the sponsors of a project
A group of shareholders who prefer that the firm follow a particular dividend policy. For
dividend discount model
Computation of today’s stock price which states that share value equals the present value of all expected future dividends.
Dividend discount model (DDM)
A model for valuing the common stock of a company, based on the
dividend growth method
a method of computing the cost
Income that a company receives in the form of dividends on stock in other companies that it holds.
A bond covenant that restricts in some way the firm's ability to pay cash dividends.
Dividend payout ratio
Percentage of earnings paid out as dividends.
dividend payout ratio
Computed by dividing cash dividends for the year
dividend payout ratio
Percentage of earnings paid out as dividends.
An established guide for the firm to determine the amount of money it will pay as dividends.
This policy governs Canada Life's actions regarding distribution of dividends to policyholders. It's goal is to achieve a dividend distribution that is equitable and timely, and which gives full recognition of the need to ensure the ongoing solidity of the company. It also specifies that distribution to individual policyholders must be equitable between dividend classes and policyholder generations, and among policyholders within any class.
The fixed or floating rate paid on preferred stock based on par value.
Dividend reinvestment plan (DRP)
Automatic reinvestment of shareholder dividends in more shares of a
A shareholders' rights to receive per-share dividends identical to those other shareholders receive.
Dividend yield (Funds)
Indicated yield represents return on a share of a mutual fund held over the past 12
dividend yield ratio
Cash dividends paid by a business over the most
Dividend yield (Stocks)
Indicated yield represents annual dividends divided by current stock price.
Amounts paid to the owners of a company that represent a share of the income of the company.
Profits paid out to shareholders by a corporation.
Dividends per share
Amount of cash paid to shareholders expressed as dollars per share.
Dividends per share
dividends paid for the past 12 months divided by the number of common shares
economic components model
Abrams’ model for calculating DLOM based on the interaction of discounts from four economic components.
This literally means "without dividend." The buyer of shares when they are quoted ex-dividend
The first day of trading when the seller, rather than the buyer, of a stock will be entitled to
Date that determines whether a stockholder is entitled to a dividend payment; anyone holding stock before this date is entitled to a dividend.
Extra or special dividends
A dividend that is paid in addition to a firm's "regular" quarterly dividend.
Extrapolative statistical models
models that apply a formula to historical data and project results for a
A way of decomposing the factors that influence a security's rate of return into common and
Garmen-Kohlhagen option pricing model
A widely used model for pricing foreign currency options.
present value of a perpetuity with growth.
Mutual funds that seek long-term capital growth. This type of fund invests primarily in equity securities.
A money manager who seeks to buy stocks that are typically selling at relatively high P/E
Opportunity to invest in profitable projects.
A phase of development in which a company experiences rapid earnings growth as it produces
an estimate of the increase expected in dividends
Compound annual growth rate for the number of full fiscal years shown. If there is a negative
Common stock of a company that has an opportunity to invest money and earn more than the
Sale of some shares of stock to get cash that would be similar to receiving a cash dividend.
A model of stock returns using a market index such as the S&P 500 to represent common or
Total amount of dividends that would be paid on a share of stock over the next 12 months
information content of dividends
dividend increases send good news about cash flow and earnings. dividend cuts send bad news.
Internal growth rate
Maximum rate a firm can expand without outside source of funding. growth generated
internal growth rate
Maximum rate of growth without external financing.
Internet business model
a model that involves
Payment by a firm to its owners from capital rather than from earnings.
log size model
Abrams’ model to calculate discount rates as a function of the logarithm of the value of the firm.
This relationship is sometimes called the single-index model. The market model says that the
A model for selecting an optimum investment portfolio,
MM dividend-irrelevance proposition
Theory that under ideal conditions, the value of the firm is unaffected by dividend policy.
The process of creating a depiction of reality, such as a graph, picture, or mathematical
Net present value of growth opportunities
A model valuing a firm in which net present value of new
percentage of sales models
Planning model in which sales forecasts are the driving variables and most other variables are
Perfect market view (of dividend policy)
Analysis of a decision on dividend policy, in a perfect capital
Pie model of capital structure
A model of the debt/equity ratio of the firms, graphically depicted in slices of
Preferred Stock Stock that has a claim on assets and dividends of a corporation that are prior
to that of common stock. Preferred stock typically does not carry the right to vote.
Present value of growth opportunities (NPV)
Net present value of investments the firm is expected to make
present value of growth opportunities (PVGO)
Net present value of a firm’s future investments.
QMDM (quantitative marketability discount model)
model for calculating DLOM for minority interests r the discount rate
Residual dividend approach
An approach that suggests that a firm pay dividends if and only if acceptable
Signaling view (on dividend policy)
The argument that dividend changes are important signals to investors
Simple compound growth method
A method of calculating the growth rate by relating the terminal value to
Simple linear trend model
An extrapolative statistical model that asserts that earnings have a base level and
Single factor model
A model of security returns that acknowledges only one common factor.
Single index model
A model of stock returns that decomposes influences on returns into a systematic factor,
Related: market model
Also referred to as an extra dividend. dividend that is unlikely to be repeated.
Liability-matching models that assume that the liability payments and the asset cash flows
Payment of a corporate dividend in the form of stock rather than cash. The stock dividend
Distribution of additional shares to a firm’s stockholders.
Sustainable growth rate
Maximum rate of growth a firm can sustain without increasing financial leverage.
sustainable growth rate
Steady rate at which a firm can grow without changing leverage; plowback ratio × return on equity.
Tax differential view ( of dividend policy)
The view that shareholders prefer capital gains over dividends,
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