In the Dividend Discount Model, Which of the Following Are

question 15

Multiple Choice

In the dividend discount model, which of the following are not incorporated into the discount rate?

• A) Real risk-free rate
• B) Risk premium for stocks
• C) Return on assets
• D) Expected inflation rate

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Definitions:

Semiannually

Happening semiannually; every six months.

360-Day Year

An accounting concept that simplifies interest calculations by using thirty-day months across a full year.

Commission

A fee paid to an agent or employee for transacting a piece of business or performing a service, typically a percentage of the sale.

360-Day Year

An accounting convention that uses 360 days in a year for calculating interest on loans and other financial instruments.