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Dividend Basis Valuation

Ownership of shares in entities - The owner to obtain a cash flow consisting of future dividends and the value of a share must correspond to the recent value of this future cash flow. The shareholder cannot expect cash flows in perpetuity as he will sell his shares at once.

Po = D_o/K_e

Note: Whereas there is growth in equity, P₀ = d₀ (1+g)/ (k_e-

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M9520206

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