Discounted Dividend Valuation

Question 1

Formula for Justified leading P/E Ratio

Answer 1

(1-RR) / (R - G)

or

DPR / (R-G)

Question 2

Formula for sustaniable growth rate

Answer 2

ROE x RR
Return On Equity X Retention Rate

Question 3

Formula for Justified trailing P/E Ratio

Answer 3

[DPRx (1+g)] / (R-G)

Question 4

Formula for PVGO

Answer 4

(E1 / RR) - Vo

E1 - Future average EPS
V0 - Present Value