Comparing Dividend Discount Model (DDM) and Free Cash Flow to Equity (FCFE) Excel Models: Two Stage Valuation
Originally published: 08/07/2016 10:49
Last version published: 02/02/2018 14:49
Publication number: ELQ-15307-2
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Comparing Dividend Discount Model (DDM) and Free Cash Flow to Equity (FCFE) Excel Models: Two Stage Valuation

This Excel Valuation model compares the DDM and FCFE models for a Two Stage Valuation

Description
The user must define the following inputs:
- Current Net Income
- Current Dividends
- Current Capital Expenditures
- Current Depreciation
- Current Revenue
- Current Working Capital
- Net Debt Cashflow
- Enter length of extraordinary growth period
- Enter growth rate for high growth period
- Inputs for cost of equity
- Beta of the stock
- Riskfree rate
- Risk Premium
- Growth rate in stable growth period
- Return on equity in stable growth

- Prof. Aswath Damodaran

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Further information

Outputs:
- Growth Rate in Stable Phase
- FCFE (Dividends) in Stable Phase
- Cost of Equity in Stable Phase
- Price at the end of growth phase
- Additional cash build up over high growth period
- Present Value of FCFE in high growth phase
- Present Value of Terminal Price
- Present Value of Cash build up in terminal year
- Value of the stock


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