When Deriving the Equity Value of a Firm,an Analyst Forecasts

question 13

Multiple Choice

When deriving the equity value of a firm,an analyst forecasts the real dividends expected to be paid in the future.In this case,which discount rate should be used?

• A) The nominal rate of return
• B) The real rate of return
• C) The risk-free rate of return
• D) The risk adjusted rate of return

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Definitions:

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