Could someone please clear my doubts regarding Gordon's growth model aka Dividend Discount Model? I'm very confused about the application of cost of equity, as in, what is its use, since it's differen

Question

SEJAL · Answer

Return on equity to shareholders is the cost of equity to company

Mohil · Answer

D1 = Do(1+g)

Mohil · Answer

G = retention ratio*return on equity % which shows how you money grows by staying in company's business

Mohil · Answer

G = growth rate of unpaid earning i.e retained earnings that are held out of total earnings of shareholders in company

Mohil · Answer

Po is price or net proceeds or mkt price whatever given

Mohil · Answer

Whr D1 shows expected dividend to be declared

Mohil · Answer

Ke = D1/Po * 100 + g

Could someone please clear my doubts regarding Gordon's growth model aka Dividend Discount Model? I'm very confused about the application of cost of equity, as in, what is its use, since it's differen

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