Stock Valuation – The Mystery of the Discount Rate
After offering the Dividend Toolkit at a rebate for the whole month of April, I’ve had many questions about stock valuation, most precisely about the discount rate. The discount rate is used to determine a stock value through the Discounted Cash Flow (DCF) model and the Dividend Discount Model (DDM). The problem is that depending on which number you use as the discount rate, the stock you are analyzing could look like the perfect underdog just because you didn’t put a high enough discount …
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