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> The value of a stock is the present value of all future dividend That is an idea from the 70s. Not many people would agree that there is an actual fair value
by Galanwe 6y ago
> The value of a stock is the present value of all future dividend
That is an idea from the 70s. Not many people would agree that there is an actual fair value for a stock anymore, much less that it is driven solely by accrued future dividends.
- Animats 6y agoAfter a while, reality comes back to bite you.
- georgeecollins 6y ago>> That is an idea from the 70s. No, that is an idea from economics predating the 1970s. Did you mean the 1870s? It predates that. You can value a stock however you like. Good luck, I wish you well.
- Galanwe 6y ago> No, that is an idea from economics predating the 1970s. Did you mean the 1870s? It predates that. It really depends on what level of formalism you consider to be the basis of "the idea". I'm referring to the "dividend discount model" (DDM) here, which to me is the first real well defined model of this idea in modern economy. Exposed in early 60s and democratized in the 70s: "The dividend discount model (DDM) is a method of valuing a company's stock price based on the theory that its stock is worth the sum of all of its future dividend payments, discounted back to their present value."