3 ms·
Either you're stupid, or there's a misunderstanding. Probably the latter. Let me try again. Assume that δ is the discount factor (δ = 1 / (1 + r)), P is price,
by tomp 11y ago
Either you're stupid, or there's a misunderstanding. Probably the latter. Let me try again. Assume that δ is the discount factor (δ = 1 / (1 + r)), P is price, and D_i is the dividend in year i.
Before dividend:
P = D_0 + δ D_1 + δ^2 D_2 + δ^3 D_3 + ...
After dividend:
P = δ D_1 + δ^2 D_2 + δ^3 D_3 + ...
- JDDunn9 11y agoWhen calculating the value of an annuity, all that matters is your number of periods, the amount, and your discount rate. This is why an annuity appreciation chart over time is continuous.
- harperlee 11y agoThis comment would be better without the gratuitous namecalling.
- tomp 11y agoSorry, I get very (too) emotional when someone is wrong with math...