We are supposed to calculate theoretical price of share from a company using DDM using below steps:
1. Using the past 7 years of dividends of a company, what is the best method to estimate its dividend growth rate (g) as a proxy (because the paid dividend growth of each year is sometimes + and -)? and why it's the best method ?
2. What factors to compare in finding several companies from very closely related sector to that company? Is it EV, EV/EBITDA, or any other ratio?
3. How to determine cost of equity using comparative earning methodology using ROE of above related companies?
4. How to estimate the next year dividend (D)?