Paper: arXiv 2406.19424

Authors: Battulga Gankhuu

Abstract

In this study, we introduce a Gordon’s dividend discount model, based on Vector Autoregressive Process (VAR). We provide two Propositions, which are related to generic Gordon growth model and Gordon growth model, which is based on the VAR process.

Complexity vs Empirical Score

  • Math Complexity: 7.0/10
  • Empirical Rigor: 1.5/10
  • Quadrant: Lab Rats — theoretically deep, empirically untested

Why this score: The paper provides a rigorous mathematical extension of the classical Gordon Growth Model using Vector Autoregressive (VAR) processes and formal propositions on price existence/moments. However, it is entirely theoretical with no empirical backtesting, real data applications, or numerical simulations.

Research Flowchart

  flowchart TD
    A["Research Goal:<br>Enhance Gordon Growth Model using VAR Process"] --> B["Inputs:<br>Dividend Data & Financial Variables"]
    B --> C["Methodology:<br>Vector Autoregressive (VAR) Modeling"]
    C --> D["Computational Process:<br>Derive Equity Valuation Equations"]
    D --> E["Key Outcomes:<br>Proposition 1 (Generic Gordon Model)"]
    D --> F["Key Outcomes:<br>Proposition 2 (VAR-Based Gordon Model)"]

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