The sum of perpetuities method (SPM) is a way of valuing a business assuming that investors discount the future earnings of a firm regardless of whether earnings are paid as dividends or retained. SPM is an alternative to the Gordon growth model (GGM) and can be applied to business or stock valuation if the business is assumed to have constant earnings and/or dividend growth. The variables are: * is the value of the stock or business * is a company's earnings * is the company's constant growth rate * is the company's risk adjusted discount rate * is the company's dividend payment
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