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Application Of Dividend Discount Model Valuation At Macedonian Stock-Exchange

Author

Listed:
  • Ivanovski, Zoran

    (University of Tourism and Management in Skopje, Macedonia)

  • Ivanovska, Nadica

    (Central Cooperative Bank, Skopje, Macedonia)

  • Narasanov, Zoran

    (Vienna Insurance Group, Skopje, Macedonia)

Abstract

Dividend discount model (DDM) is the simplest model for valuing equities in finance. Many analysts belived that DDM is outmoded, but much of the intuition that drives Discounted Cash Flow (DCF) valuation is embedded in the DDM model. There are also specific companies stocks where the DDM model remains a useful tool for estimating value. The basic task of these research is to examine if DDM models offer relevant and safe valuation of long-term securities at Macedonian Stock Exchange (MSE) through the process of empirical valuation of random chosen stocks. This research helped us to identify problems in use of DDM valuation models at MSE, to determine causes for differences between the intrinsic values and the stock market prices and to determine basic parameters for implementation of valuation on Macedonian financial market. We find that DDM models are usefull only as additional tool beside relative and DCF stocks valuation at MSE

Suggested Citation

  • Ivanovski, Zoran & Ivanovska, Nadica & Narasanov, Zoran, 2015. "Application Of Dividend Discount Model Valuation At Macedonian Stock-Exchange," UTMS Journal of Economics, University of Tourism and Management, Skopje, Macedonia, vol. 6(1), pages 147-154.
    • Handle: RePEc:ris:utmsje:0144
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    File URL: http://utmsjoe.mk/files/Vol.%206%20No.%201/6-1-12-UTMS_Journal_of_Economics.pdf
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    References listed on IDEAS

    as
    1. Bekaert, Geert & Harvey, Campbell R., 1997. "Emerging equity market volatility," Journal of Financial Economics, Elsevier, vol. 43(1), pages 29-77, January.
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    Cited by:

    1. Leo Vashkor Dewri & Md. Rashidul Islam & Fatema-Tuz-Johra & M Mizanur Rahman, 2021. "Measuring Firms Intrinsic Values in an Emerging Economy: Evidence from Bangladesh," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 11(6), pages 429-445, June.

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    More about this item

    Keywords

    valuation; securities; free cash flow; dividends; equity;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

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