computingRwithGGM: Calculates Required Rate of Return using the Gordon Growth Model.
Description
Under the assumption of efficient prices, the Gordon growth model has been used to estimate a stock’s required rate of return, or equivalently, the market-price-implied expected return (Jerald E. Pinto, 2020).
Usage
computingRwithGGM(divN1, g, spNot)
Value
Input values to three arguments divN1 , g and spNot.
According to information provided by Jerald E. Pinto (2020), the method computingRwithGGM is developed for computing Required Rate of Return using the Gordon Growth Model for the values passed to its three arguments. Here, divN1 is dollar value of the dividend in one year, g is dividend growth rate, and spNot is current share price.
References
Pinto, J. E. (2020). Equity Asset Valuation (4th ed.). Wiley Professional Development (P&T). https://bookshelf.vitalsource.com/books/9781119628194