Final answer:
The discounted dividend model (DDM) and corporate valuation models (CVM) are methods used to determine the value of a company or its stock, but they differ in the variables they consider and the assumptions they make.
Step-by-step explanation:
The discounted dividend model (DDM) and corporate valuation models (CVM) are both methods used to determine the value of a company or its stock. However, they differ in the variables they consider and the assumptions they make.
The DDM focuses on the future dividends that a company is expected to pay to its shareholders. It assumes that the value of a stock is based on the present value of these expected dividends. The DDM takes into account factors such as the growth rate of dividends and the discount rate used to determine their present value.
On the other hand, CVM takes a broader approach and considers multiple factors in determining the value of a company. These factors may include the company's financial statements, cash flows, assets, and other indicators of its financial performance.