Stock duration

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Stock duration is the duration of an equity stocks is the percentage change in stock prices in response to a 1% change in the long-term return that stocks are priced to deliver.

Contents 1 Duration 2 D_ddm = 1/(Ke-g) 3 Modified duration 4 See also 5 External links

[edit] Duration

The duration is about 67 (February, 2004) (the precise figure depends on the exact return that you believe stocks are priced to deliver).

As per DDM: Formula for the duration of stock is as follows-

[edit] D_ddm = 1/(K_e-g)

Where,

      D_ddm = Duration of stock in DDM
      Ke = Discount Rate
      g = Growth in Dividends

[edit] Modified duration

For the stock market as a whole, the modified duration is simply the price/dividend ratio, which for the S&P 500 is currently about 62 (February, 2004).

[edit] See also

• Bond duration

[edit] External links

• Hussman Funds - Weekly Market Comment: February 23, 2004 - Buy-and-Hold For the Duration?