The Valuation Principle States That the Value of a Share

question 39

True/False

The Valuation Principle states that the value of a share is equal to the present value (PV)of both the dividends and future sale price of that share which the investor will receive.

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Definitions:

Shrinkage

The loss of inventory that can occur from theft, damage, or errors in the counting or recording of stock.

Purchase Allowance

Purchase allowance is a reduction in the purchase price, granted by the seller to the buyer, often due to defects in goods or discrepancies in the order.

Sales Discount

A reduction from the listed price of goods or services, offered by sellers to buyers under specific conditions.