The Dividend Discount Model (DDM) is a quantitative method used for predicting the price of a company's stock based on the theory that its present-day price is worth the sum of all of its future dividend payments when discounted back to their present value. The DDM takes into account not only a company's current dividends, but also its expected growth rate in those dividends. This makes it an important tool for investors who want to make informed decisions about where to put their money.While there are some drawbacks to using the DDM – such as its reliance on assumptions about future growth rates and dividend payouts – overall it is a very useful way of assessing how much a stock is worth today. It can help investors determine whether or not a company's share price represents good value for money, and give them an idea of what they can expect from their investment over time.
