Question about the FCFE DCF for high dividend stocks e.g. telecomms
Let's say I use the FCFE DCF to value a dividend stock: If company X stock is $3, it is expected to pay $0.30 in dividends a year and a 5-year FCF DCF into the future values it at $4, is the projected return on the stock according to the DCF A) 75% over 5 years because dividends are added after valuations are complete or B) 25% over 5 years because dividends are included in free cash flows which can be used for purposes like paying out dividends
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