International Journal of Economics & Management Sciences

ISSN: 2162-6359

Open Access

Roy Bornilla Gacus

USM Avenue, Brgy Poblacion, Kabacan, Cotabato 9407

  • Research Article
    The Reliability of Constant Growth Dividend Discount Model (DDM) in Valuation of Philippine Common Stocks
    Author(s): Roy Bornilla Gacus and Jennifer E HinloRoy Bornilla Gacus and Jennifer E Hinlo

    The constant growth dividend discount model (DDM) is said to be the simplest and most popular valuation method to estimate the intrinsic value of the company’s stocks. This study is aimed to test the reliability of the constant growth DDM in valuation of the selected common stock listed companies in the Philippine Stock Exchange (PSE). The accuracy of constant growth DDM to predict the value of common stocks was compared from the actual values using the symmetric median absolute percentage error (sMdAPE), and then tested whether the median difference between the predicted and actual values of the selected common stock listed companies were significant using the Wilcoxon signed-rank test. Results of the study showed that majority of the companies had a sMdAPE less than 30%. This means that the error to predict the common stock values among the companies was less than 30%. Further.. Read More»
    DOI: 10.4172/2162-6359.1000487

    Abstract PDF

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