Relevance of Gordon Model in Share Price behaviour: Case of Great Britain

by

ACKNOWLEDGEMENT

I would like to take this chance for thanking my research facilitator, friends & family for support they provided & their belief in me as well as guidance they provided without which I would have never been able to do this research.

DECLARATION

I, (Your name), would like to declare that all contents included in this thesis/dissertation stand for my individual work without any aid, & this thesis/dissertation has not been submitted for any examination at academic as well as professional level previously. It is also representing my very own views & not essentially which are associated with university.

Signature:

Date:

ABSTRACT

It is the nature of the man who wants more so you can be more. He sets his goals and aspirations in a position that combines the richness, strength and power. And the achievement of some of them only temporarily satisfied, will be held the dream of getting this position of strength. His position is more than the other. However, proceeded to hold a particular purchase in the market for the supply reveals shareholder downside risk. Therefore becomes imperative for them to be reasonably anticipated as stock prices are likely to act in the future. Earlier ideas (technical) argued that previous models of stock price would apply in the future. Fame (1965) refuted this claim and said that changes in stock prices appeared to chance. Gordon (1959) suggested that future dividends have a massive influence on the behavior of stock prices. Despite the detail that Modigliani and Miller (1961) dismissed the relevance of dividends, management said that dividends matter under market imperfections. Therefore influence the behavior of management dividend stock price? This study will examine the proposition that Gordon analytical performance model alongside share prices in Britain for a period of time in eighteen years (December 1990-December 2008) in the Financial Times Stock Exchange. The deduction will be made on the relevance of Gordon model the behavior of stock prices in Great Britain.

 

 

 

TABLE OF CONTENTS

ACKNOWLEDGEMENTII

DECLARATIONIII

ABSTRACTIV

CHAPTER 1: INTRODUCTION1

1.1 Background1

1.2 Rationale1

1.3 Research Objective3

1.4 Research Problem4

1.5 Research Hypothesis5

1.6 Significance of Study5

2.2 Dividend Discount Models37

2.3 Gordon Dividend Model38

CHAPTER 3: RESEARCH METHODOLOGY42

3.1 Research conceive42

3.2 Data Collection43

3.3 Statistical Tools Used44

3.4 Data investigation, Validity and Reliability44

CHAPTER 4:. ANALYSIS AND DISCUSSION45

CHAPTER 5: CONCLUSION56

Empirical Evidence57

REFERENCES59

APPENDIX67

Table 175

Table 276

Table 377

Table 478

Table 579

CHAPTER 1: INTRODUCTION

1.1 Background

Price behavior of the offer has been demystifying many economists, educators, investment, statistics and investors. For many years dating back to decades and centuries, these groups of people who have had great concern in the development and control of behavior models of the bid prices. Indeed, the share prices of the stock has tended to be very volatile overtime. For investors involved in the production of cash in supply markets, it is essential to work out an action sense general price of supply in the lineup to the evolution of the purchase of winning strategy . The efficient markets hypothesis (EMS) assumes that security prices duplicates all the information it offers. stock prices, therefore, to respond to new data directly, ...