I saw that when estimating the share price with DCF-Analysis (Discounted Cashflow Analysis) and with DDM (Dividend Discount Model) the estimated share price happens to be different sometimes when using the data of pro forma-financial statements (forecasted using estimates).
Why is this the case? Shouldn't the share price be the same/similar in both cases?
Is this due to the used estimates when forecasting the pro forma financial statements?
How to decide which share price to use when they are rather far apart?

Thank you,

  • $\begingroup$ Many firms pay no dividends. However, every firm will have cashflows. Insofar, there is no obvious reason why the two should provide the same result. $\endgroup$
    – AKdemy
    May 17 at 20:38

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