The Current Value of a Stock Is an Estimate of

question 93

Multiple Choice

The current value of a stock is an estimate of

• A) the present value of future dividends and the future price of the stock.
• B) future earnings and future P/E ratios.
• C) all future dividends discounted at the required rate of return minus the growth rate.
• D) the stock's future beta and the future market rate of return.

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Definitions:

Settlor

A settlor is the person who creates a trust by transferring assets into it, setting the terms and electing trustees to manage the trust assets for the benefit of the beneficiaries.

Creates

Refers to the act of bringing something into existence or producing something through a process.

Trust

A fiduciary arrangement that allows a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries.

Implied Trust

A trust formed by the law from the conduct or circumstances of the parties involved, rather than by explicit written agreement.