I would like anyone reading this to confirm whether these are errors in the Notes or not.
- Record Date: Schweser Notes state that this is ‘the date on which all owners of shares will receive the dividend payment on their shares.’
CFAI and every other source that I found makes it clear that this is the date management determine which shareholders are eligible for dividend payments.
- Multistage Dividend Discount Model Example:
Consider a stock with dividends that are expected to grow at 15% per year for two years, after which they are expected to grow at 5% per year, indefinitely. The last dividend paid was $1.00, and ke = 11%. Calculate the value of this stock using the multistage growth model. Schweser Notes calculate the terminal value using P1, which is D2/(k-g). Unless my brain has stopped functioning, it should be P2, which is D3/(k-g) = D2*(1+5%)/(11%-5%)
Can anyone confirm if my line of thinking is correct?