Dividend Discount Model - Commercial Bank Valuation (FIG)

Why the Dividend Discount Model (DDM) is used to value commercial banks instead of the traditional Discounted Cash Flow (DCF) analysis. By “Financial Modeling Training And Career Resources For Aspiring Investment Bankers“ There are 3 main reasons why the DCF and the concept of Free Cash Flow (FCF) do not apply to commercial banks: 1. You can’t separate operating vs. investing vs. financing activities - the lines are very blurry for a bank, since items like debt are more o