This video delves into equity valuation with a focus on the Dividend Discount Model (DDM) for common stock. It's designed to help finance students master problem-solving strategies for DDM questions using timelines and clear formulas. The video covers a two-part question involving a company's dividend policy: an initial phase of declining dividends over three years followed by a perpetuity of constant dividends. Key insights include understanding when to use growing annuity versus perpetuity formulas and the importance of visualizing problems with timelines. You'll learn how to calculate the present value of dividends for both phases and determine the market value of a stock. Practical tips and avoiding common errors, such as misapplying perpetuity formulas for finite periods, are emphasized. This comprehensive walkthrough ensures you're equipped to tackle similar equity valuation problems with confidence. Perfect for finance students taking courses like FINA 385 or FINA 395, this video breaks down complex concepts into manageable steps.