Revisiting "dividend yield plus growth" and its application.": An article from: Engineering Economist

This digital document is an article from Engineering Economist, published by Institute of Industrial Engineers, Inc. (IIE) on January 1, 1996. The length of the article is 8049 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

From the author: In this paper we extend Thompson's [17] work using time series models within the discounted cash flow framework to estimate the cost of equity capital for a firm. In particular we do the following: First, we prove the existence and uniqueness of a solution for the cost of equity capital. Secondly, we verify that the cost of equity function is continuously differentiable and derive the formula for its reliability. Formulas for both the cost and its reliability are in terms of infinite sums or infinite dimension matrices. Thirdly, we derive estimators of the cost of equity capital and its reliability which are in terms of finite sums and easy to calculate. We show that these estimated converge to the cost of equity capital and its reliability. Finally, our procedure for estimation applies to a wide variety of time models that may be used to forecast dividends.

Citation Details
Title: Revisiting "dividend yield plus growth" and its application."
Author: Howard E. Thompson
Publication:Engineering Economist (Refereed)
Date: January 1, 1996
Publisher: Institute of Industrial Engineers, Inc. (IIE)
Volume: v41 Issue: n2 Page: p123(25)

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