How to calculate terminal value for a dividend discount model?
I really can't figure this out. I'm trying to learn the basics of how to do a DDM. M&I says to calculate your TV based on P/E and EPS in the final year and then discount that. But it's so vague. How would you be using P/E and EPS to calculate your terminal value? I mean, what do you do with them?
What? If you have Price/Earning and Earnings then you can multiply them....and voila.....you have Price!
But how is that helping you find your terminal dividend value? Because price and dividends are different
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