The Relevance of the Gordon Model to Share Price Behavior Research Proposal

The Relevance of the Gordon Model to Share Price Behavior
A research proposal on the relevance of the Gordon Model to share price behavior in Great Britain.
# 153688 | 4,157 words | 21 sources | APA | 2012 | KE
Published on Oct 04, 2013 in Business (Finance, Investment and Banking)

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This research proposes to analytically examine the Gordon model proposition alongside share price behavior in the Great Britain over a period on five years (December 2003 to December 2008) at the Financial Times Stock Exchange. The paper provides a literature review and details the research methodology to be used. The paper also includes a Gantt chart that indicates the major activities and timelines related to this research project.

Literature Review
Empirical Evidence
Research Methodology

From the Paper:

"The behaviour of stock prices has been a puzzle to many, economists, teachers of finance, statistician and investors alike. For many years, running into decades and centuries, these groups of individuals have had great interest in developing and testing models of stock prices behaviour. In reality, share prices movement has tended to be very volatile overtime. For investors interested in making money in the stock markets, it becomes imperative to reasonably determine the general movement in the stock prices in order to develop a wining investment strategy. The Efficient Markets Hypothesis (EMS) supposes that security prices reflect all the available information. The security prices will therefore respond to new information immediately as it become available to the market (Fama 1965). The EMS has had a long standing assumption, such that, information and trading costs, i.e. the cost of the cost of getting prices to reflect information will always be zero.
"In stock market trading, there are two wide held strategies of predicting stock market prices; the technical (chartist) and fundamental strategy. The technical strategy assumes that history tend to repeat itself; that is, past trends in security prices on the stock-market, will tend to recur going forward. Therefore in order to understand future behaviour in stock market prices, a strict familiarity with the past trend of price pattern is vital. In this regard the share price for a given stock today is the greatest indication of what the price will be tomorrow (Fama 1965). On the other hand, a fundamental strategy assumes that an individual security has an intrinsic value at any given point in time, a factor that depends on the earning potential of the stock."

Sample of Sources Used:

  • Asamoah, N 2010, "Impact of Dividend Announcement on Share price Behaviour in Ghana," Journal of Business & Economics Research, Vol. 8, No. 4
  • Baker, K 2009, Dividends and Dividend Policy, John Wiley & Sons, Inc New Jersey
  • Burke, J. (2009). Qualitative research, Retrieved on April 23, 2010 from
  • Eugene, F 1965, "Behaviour of Stock-Market Prices," Journal of Business, Vol. 38, No.1, p. 34-105
  • Eugene, F 1974, "The empirical relationship between the dividend and investment decisions of firms," The American Economic Review, Vol. 64, p. 304-318

Cite this Research Proposal:

APA Format

The Relevance of the Gordon Model to Share Price Behavior (2013, October 04) Retrieved January 23, 2019, from

MLA Format

"The Relevance of the Gordon Model to Share Price Behavior" 04 October 2013. Web. 23 January. 2019. <>