Dividend Discount Model (DDM)
In discounted cash flow (DCF) valuation techniques the value of the stock is estimated based upon present value of some measure of cash flow. Dividends are the cleanest and most straightforward measure of cash flow because these are clearly cash flows that go directly to the investor.
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- Common-Size Balance Sheet: Assets
- Analysis of Solvency Ratios
- Analysis of Geographic Areas
- Common Stock Valuation Ratios
- Price to FCFE (P/FCFE)
- Net Profit Margin since 2013
- Return on Equity (ROE) since 2013
- Return on Assets (ROA) since 2013
- Price to Earnings (P/E) since 2013
- Price to Sales (P/S) since 2013
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Intrinsic Stock Value (Valuation Summary)
Twitter Inc., dividends per share (DPS) forecast
US$
| Year | Value | DPSt or Terminal value (TVt) | Calculation | Present value at |
|---|---|---|---|---|
| 0 | DPS01 | |||
| 1 | DPS1 | = × (1 + ) | ||
| 2 | DPS2 | = × (1 + ) | ||
| 3 | DPS3 | = × (1 + ) | ||
| 4 | DPS4 | = × (1 + ) | ||
| 5 | DPS5 | = × (1 + ) | ||
| 5 | Terminal value (TV5) | = × (1 + ) ÷ ( – ) | ||
| Intrinsic value of Twitter Inc. common stock (per share) | ||||
| Current share price | ||||
Based on: 10-K (reporting date: 2021-12-31).
1 DPS0 = Sum of the last year dividends per share of Twitter Inc. common stock. See details »
Disclaimer!
Valuation is based on standard assumptions. There may exist specific factors relevant to stock value and omitted here. In such a case, the real stock value may differ significantly form the estimated. If you want to use the estimated intrinsic stock value in investment decision making process, do so at your own risk.
Required Rate of Return (r)
| Assumptions | ||
| Rate of return on LT Treasury Composite1 | RF | |
| Expected rate of return on market portfolio2 | E(RM) | |
| Systematic risk of Twitter Inc. common stock | βTWTR | |
| Required rate of return on Twitter Inc. common stock3 | rTWTR | |
1 Unweighted average of bid yields on all outstanding fixed-coupon U.S. Treasury bonds neither due or callable in less than 10 years (risk-free rate of return proxy).
3 rTWTR = RF + βTWTR [E(RM) – RF]
= + [ – ]
=
Dividend Growth Rate (g)
Company does not pay dividends.