Two-Stage Dividend Discount Model
![Two-Stage Dividend Discount Model - Templarket - Business Templates Marketplace]()
![Two-Stage Dividend Discount Model - Templarket - Business Templates Marketplace]()
This model is designed to value the equity in a firm with two stages of growth: an initial period of higher growth, and a subsequent period of stable growth.
The user should enter the following inputs:
1. Length of high growth period
2. Expected growth rate in earnings during the high growth period.
3. Dividend payout ratio during the high growth period.
4. Expected growth rate in earnings during the stable growth period.
5. Expected payout ratio during the stable growth period.
6. Current Earnings per share
7. Inputs for the Cost of Equity
Note: this model is being shared with the authorization of Professor Aswath Damodaran from NYU Stern Business School (www.damodaran.com)
The user should enter the following inputs:
1. Length of high growth period
2. Expected growth rate in earnings during the high growth period.
3. Dividend payout ratio during the high growth period.
4. Expected growth rate in earnings during the stable growth period.
5. Expected payout ratio during the stable growth period.
6. Current Earnings per share
7. Inputs for the Cost of Equity
Note: this model is being shared with the authorization of Professor Aswath Damodaran from NYU Stern Business School (www.damodaran.com)
