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Is it appropriate to use the Dividend Discount Model to value a Nike? Explain.

Is it appropriate to use the Dividend Discount Model to value a Nike? Explain.

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The dividend discount model (DDM) is a method of valuing a company's stock price based on the theory that its stock is worth the sum of all its future dividend payments, discounted back to their present value. In other words, it is used to value stocks based on the net present value of the future dividends.

Analyst can use dividend discount model for value Nike because of following reasons:

1. Company is operating since long term, so it financial position is more stable.

2. Company uses to pay regular dividend.

3. Growth rate of company is stable and expected to stable in future

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