The Maximum Dividend Method Is

question 41

Multiple Choice

The maximum dividend method is

• A) the cleanest for valuing assets, but creates problems valuing surplus cash
• B) the cleanest for valuation purposes but its dividend-laden financial statements can dramatically understate the firm's cash position
• C) the cleanest for cash planning, but creates problems valuing the venture by discounting the dividends
• D) calculated by directly discounting the cash flow statement's projected dividend flow to investors, but ignores risks associated with periodic gluts of surplus cash

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