Answer :
INFORMATION TO DETERMINE STOCK VALUE
The information required to determine a stock's value using the zero growth model are:
1) Annual Dividend Amount
The dividend growth rate is the annualized percentage rate of dividend growth that a specific stock experiences over time. Numerous established corporations attempt to boost the dividends given to their investors regularly.
The periodic dividend growth can be computed by dividing the current dividend Di by the previous dividend Di-1, then removing one from the result. The resulting percentage represents the dividend growth.
The three fundamental dividend growth patterns are constant growth, zero growth, and differential growth.
2) Dividend Discount Model (DDM)
The dividend discount model (DDM) is a quantitative method used to anticipate the price of a company's stock based on the assumption that the stock's current price equals the total of all of its future dividend payments discounted back to its present value.
Dividend Discount Model = Intrinsic Value = Sum of Present Value of Dividends + Present Value of Stock Sale Price. The sale price will represent the estimated future cash flow if the stock does not pay dividends.
A risk-adjusted discount rate is the rate achieved when calculating the present value of a hazardous investment by combining an expected risk premium with the risk-free rate. A risky investment is an investment with increased risk, such as real estate or a business venture.
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