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How Can an Analyst Be Credible in Stating That the Value

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Essay

How can an analyst be credible in stating that the value of a stock is equal to the discounted value of all future dividends when a company may pay dividends indefinitely and it is virtually impossible to predict dividends beyond some reasonable horizon?


Definitions:

Concentration Ratio

A measurement of the market share or output controlled by the largest firms within an industry, used to assess the level of competition.

Costly to Ship

Refers to items or materials that are expensive to transport, typically because of their weight, size, or special handling requirements.

Degree of Monopoly

Measures the level of market control and price-setting power possessed by a monopolist.

Very Localized

Referring to something that is confined to a very small or specifically defined geographic area or community.

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