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The Formula for common stock. PV = Po*= DIV1 / (1+ rCE) + DIV1 / (1+ rCE) 2 + DIV1 / (1+ rCE) 3 + ... +... = DIV 1 / rCE. Dividends Cash Flow Stream grows according to the Discrete Compound Growth Formula. DIVt+1 = DIVt x (1 + g) t. t = time in years. Zero Growth Model Pricing. PV = Po* = DIV1 / rCE . Constant Growth Model Pricing . PV = Po* = DIV1 / (rCE -g) … ................
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