One Rationale for Using Expected Dividends in Valuation Is

question 4

Multiple Choice

One rationale for using expected dividends in valuation is:

• A) Dividends are a necessary payment in order for a firm to have value.
• B) Dividends are paid in cash, and cash serves as a measurable common denominator for comparing the future benefits of alternative investment opportunities.
• C) Dividends are the most reliable measure of value because most companies payout dividends to shareholders.
• D) Dividend payout ratios are set based on profitability.

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Definitions:

Environmental Events

Occurrences or changes in the external environment that can impact an organization, such as natural disasters, regulatory changes, or economic shifts.

Countertrends

Movements or changes that go against the prevailing direction or trends in a particular area or sector.

Professional Associations

Organizations that aim to further a particular profession, protect the interests of its members, and improve professional standards, education, and ethics.

Environmental Scanning

The process of collecting information about external forces that can impact an organization's success, to assist in strategic planning.