The Dividend Discount Model Indicates That the Value of a Stock

question 108

True/False

The dividend discount model indicates that the value of a stock is the present value of the dividends it will pay over the investor's horizon, plus the present value of the expected stock price at the end of that horizon.

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Definitions:

Hours

A period of time equal to a twenty-fourth part of a day and night and universally understood to be 60 minutes.

Dimensional-analysis

A mathematical technique used to convert units of measurement without changing the dimensional or physical value.

Kilometers

A unit of length in the metric system equal to 1,000 meters, often used to measure distances.

Miles

Units of distance measuring 5,280 feet, or approximately 1.609 kilometers, commonly used in the United States.