Dividend discount model (DDM) is the simplest model for valuing equities in finance. Many analysts belived that DDM is outmoded, but much of the intuition that drives Discounted Cash Flow (DCF) valuation is embedded in the DDM model. There are also specific companies stocks where the DDM model...

We examine the valuation performance of Discounted Free Cash Flow Model (DFCF) at the Macedonian Stock Exchange (MSE) in order to determine if this model offer significant level of accuracy and relevancy for stock values determination. We find that stock values calculated with DCF model are very...

Standard formulas for valuing the equity of going concerns require prediction of payoffs "to infinity" but practical analysis requires that they be predicted over finite horizons. This truncation inevitably involves (often troublesome) "terminal value" calculations. This paper contrasts dividend...

Part I: The Concept of Value, Existence of a Firm, and The Objective Value Maximization -- AN OVERVIEW OF CORPORATE VALUATION -- CORPORATE VALUE CREATION -- TIME VALUE OF MONEY -- SECURITY MARKETS -- Part II: Financial Information as a Source of Valuation Inputs -- OVERVIEW OF FINANCIAL...

Stocks with high idiosyncratic volatility perform poorly relative to low idiosyncratic volatility stocks. We offer a novel explanation of this anomaly based on real options, which is consistent with earlier findings on idiosyncratic volatility (the positive contemporaneous relation between...

It is well-known that stock prices fluctuate far more than dividends. Traditional valuation methods are not able to depict this fact. In this paper we incorporate excess volatility into a simple DCF model by considering an autoregressive cash flows process with random coefficients. We show that...