I never really understood what do they mean when they say that…
DDM is for minority perspective, and
FCF is for control perspective…
thnx a lot for helping guys…really confussed…
for DDM valuation, you calculate with what the company pays (Dividend).You are out of control for the dividend payment that you will receive. You will get what they give. so, it’s good for minority interest that has no power over the dividend policy cos they will be recieving just dividend.
for FCFE, dividends hasn’t been paid out and you have the power to change your dividend policy…it’s in ur hands whether you like to pay it or not…so, it takes from the control perspective…
hey thnx man…i get it now… 