The Gordon growth model value for X company was estimated

Question: The Gordon growth model value for X company was es…

The Gordon growth model value for X company was estimated as €22.18 based on:

 

  • a current dividend of €0.68,

 

  • an expected dividend growth rate of 6 percent, and

 

  • a required return on equity of 9.25 percent.

 

What if the estimates of r and g can each vary by 25 basis points? How sensitive is the model value to changes in the estimates of r and g ?​

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jagguarpaw January 9, 2017 0 Comments