In the Dividend Discount Model, Which of the Following Are

question 15

Multiple Choice

In the dividend discount model, which of the following are not incorporated into the discount rate?

• A) Real risk-free rate
• B) Risk premium for stocks
• C) Return on assets
• D) Expected inflation rate

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Definitions:

Cost of Merchandise Sold

The total cost of goods that have been sold during a specific period, including purchase price, transportation, and handling charges, less any discounts or allowances.

Cash Payment

The act of settling a debt or paying for goods or services with cash or equivalent instruments, such as checks.

Direct Method

A way of preparing the cash flow statement where actual cash flow information from operating activities is used instead of adjustments to net income.

Revenues

income that a business receives from its normal business activities, usually from the sale of goods and services to customers.