The required rate of return is the minimum return an investor will accept for owning a company’s stock, as compensation for a given level of risk associated with holding the stock.
The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its per-share earnings (EPS). The price-to-earnings ratio is also sometimes known as the price multiple or the earnings multiple.
Gordon growth model (GGM), which assumes a stable dividend growth rate and was named in the 1960s after American economist Myron J. Gordon
This model assumes a stable growth in dividends year after year.