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HOSTING A TOTAL OF 318 FORMULAS WITH CALCULATORS

Three Stage Dividend Discount Model

This model is designed to value the equity in a firm with three stages of growth - an initial period of high growth, a transition period of declining growth and a final period of stable growth.

d k-g 2+[1+g 2+n 1+n 2 2][g 1-g 2]

here,n1= Length of high growth phase.n2= Periods until constant growth phase. n2= n1+ length of transition phase.g1= Growth rate during high growth phase. g2= Growth in constant growth phase after n.d=dividend for the next year.

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