graduate student
The article presents a comparative analysis of the effectiveness of a simplified dividend discount model (DDM) for stock valuation in the Russian and foreign (using the Indonesian market as an example) stock markets. The study is based on comparing the accuracy of the DDM under different approaches to calculating the discount rate and equity risk premium, including the use of repo rates and the CAPM model. The analysis covers data from 45 Russian and 43 Indonesian companies. The results show that, for the Russian market, forecast errors are significantly higher than those observed in the Indonesian market. The best results for the Russian market were achieved when adjusted U.S. indicators were used to calculate the equity risk premium (ERP). The findings indicate substantial limitations in the application of the DDM in the Russian market, highlighting the need for further research into alternative approaches to stock valuation.
dividend discount model (DDM), stock valuation, Russian and foreign stock markets, discount rate, equity risk premium
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