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Done Stocks and Capital Budgeti... 17 Short Questions 1. What are the limitations of discounted dividend model? 2. Simplify d
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Solution :- 1

Limitations of Dividend Discount Model

The First One Limitation is that it is based on Many assumptions .

Second we say that it is totally based on Dividends , It is not for the Valuation of the stocks that are not paying dividend

Another one is that no one can correctly estimate the future growth rate and a little change in growth rate can affect the Stock prices largely

Also one thing is that it does not include effect of others factors such as buyback etc.

As per HomeworkLib policy we need to answer only one question at once so please ask other as seperate one .

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