In contrast to the FCFE approach, the dividend discount model (DDM) approach values

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The dividend discount model (DDM) approach values the stream of cash flows that stockholders expect to receive through dividend payments. It focuses only on the cash flows that are paid out as dividends and does not include any cash flows that are retained by the company for other purposes. Therefore, it is different from the FCFE approach, which includes all cash flows that are available for distribution to stockholders, including both dividends and share buybacks.

In Contrast to the FCFE Approach, the Dividend Discount Model