Dividend discount model

Valuing a share as the present value of the dividends it will pay. The oldest equity valuation model and still the natural one for banks, where free cash flow is hard to define because capital is the raw material.

A share paying ₹18 next year, growing at 6%, discounted at 13%, is worth ₹272.57.

Its limitation is that most companies pay out far less than they could, so the model values the distribution policy rather than the business. Extending it to distributable cash flow, meaning what could be paid while maintaining required capital, fixes that and is the standard approach for a bank.

For a company paying no dividend at all, use something else.