Advantages and Disadvantages of Dividend Discount Model and Better Alternatives

DOI

10.2991/978-94-6463-042-8_66How to use a DOI?

Keywords

Dividend Discount Model; The intrinsic value of the stock; Iflytek; Alternative model

Abstract

The dividend discount model (DDM) is an efficient stock market value valuation model, which takes dividends as the primary analysis goal to predict and analyze the price of the analyzed stock. According to the existing formula and principle of DDM, taking Iflytek Co., Ltd. as an example to analyze the applicability and defects of DDM. In addition, combined with the analysis of another mode that can replace DDM - discounted cash flow. Therefore, the practicability of DCF and its comparison with DDM are analyzed. The conclusion is that DDM is practical. However, due to the instability of the dividend market, the result has a particular error. Therefore, the DCF model can be used instead. Furthermore, the DCF model can provide more detailed and long-term analysis, and the results obtained by DCF model are relatively reliable.

Copyright

© 2023 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Jingning Xu
PY  - 2022
DA  - 2022/12/29
TI  - Advantages and Disadvantages of Dividend Discount Model and Better Alternatives
BT  - Proceedings of the 2022 International Conference on mathematical statistics and economic analysis (MSEA 2022)
PB  - Atlantis Press
SP  - 456
EP  - 461
SN  - 2352-538X
UR  - https://doi.org/10.2991/978-94-6463-042-8_66
DO  - 10.2991/978-94-6463-042-8_66
ID  - Xu2022
ER  -