If you want to value a firm that has consistent earnings growth,but varies how it pays out these earnings to shareholders between dividends and repurchases,the simplest model for you to use is the:

Question

Quizplus · Accepted Answer

The total payout model is the best choice in this scenario because it considers both dividends and share repurchases in valuing a firm. This model uses the total amount of cash paid out to shareholders as the basis for valuing the company, rather than just focusing on dividends or free cash flow. Therefore, it is the most appropriate choice for a firm with varying payout policies.

If You Want to Value a Firm That Has Consistent