Money and the Myth: A Simple Dividend Discount Model (DDM) for Equity Valuation

Dinesh Sairam here with yet another Excel model (Gasp)!

This time, I present to you, “Money and the Myth”, a Dividend Discount Model (DDM). Once again, I must credit Prof. Aswath Damodaran. I can’t thank him enough for teaching the way he does. Go ahead and visit his website or YouTube Channel while we’re at it.

If you remember my earlier Valuation thread titled ‘Numbers and Narratives: A Simple Discounted Cash Flow (DCF) Model for Equity Valuation’, I made the following disclaimer:

So, this is the alternative. A Dividend Discount Model (DDM) can be used to value a BFSI firm as well. Without further ado, here’s the link to the model:

I have valued Dewan Housing Finance Limited (DHFL) here as an example. But it’s pretty hands-on. You can use it to value any BFSI firm.

A few pointers before you can use the model;

  1. You can change the values in the cells highlighted in yellow only. Changing anything else will mess up the model.

  2. A DDM is more approximate than a DCF. Given the choice between valuing a regular firm using a DCF or a DDM, I would prefer a DCF every single time. Of course, since a highly leveraged firm is tricky to value using a DCF, a DDM is preferable.

  3. Because a DDM is approximate, always make sure to use a high Margin of Safety. What’s ‘high’ can be decided by you personally, but I hope you get my drift.

  4. Feel free to reach out to me using a DM in VP or mail me at for further queries

Happy Valuation!


Hi @dineshssairam ,

Many thanks for sharing the model . But the dropbox link seems to be broken now.

1 Like

It is still working for me. Try this:

Hi @dineshssairam,

New link is working. Thanks a lot.