Volume 20 No 22 (2022)
 Download PDF
A Study On Reliability Of Dividend Discount Model In Determining The Intrinsic Value Of Selected Stocks From NSE
Dr. Bhavya Vikas, Dr. Charithra C M , Dr. Mukund Sharma
The purpose of this research is to empirically test the forecasting power of a well-known assetvaluation model, the dividend discount model. It examines if there exists a reliability on this model by estimating the difference between intrinsic values predicted by this model and realized returns at varied expected growth rate in dividends. The objectives of the study is to examine the various variables used to predict the share prices of selected mid cap companies using DDM. Also, to evaluate the stock prices of selected companies using DDM in the view of market uncertainties. To compare the valuated stock’s intrinsic value with their market stock value resulting in their overvaluation and undervaluation and to derive an outcome of tested applicability of DDM model for investors to take decisions. All the 10 selected Midcap Stocks are overvalued by Dividend Discount Model and there isa significance difference between intrinsic value and market value as on July 31st 2021. The mean of Intrinsic value and market value of 10 selected midcap stocks are significantly varying. The results suggest that there exist significant differences between the returns forecasted by the dividend discount model and the realized returns.
Dividend Discount Model, CAPM, Equity, Returns, Investment, Stock Market
Copyright © Neuroquantology

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Articles published in the Neuroquantology are available under Creative Commons Attribution Non-Commercial No Derivatives Licence (CC BY-NC-ND 4.0). Authors retain copyright in their work and grant IJECSE right of first publication under CC BY-NC-ND 4.0. Users have the right to read, download, copy, distribute, print, search, or link to the full texts of articles in this journal, and to use them for any other lawful purpose.