What Is the Model Called That Determines the Present Value

question 67

Multiple Choice

What is the model called that determines the present value of a stock based on its next annual dividend,the dividend growth rate,and the applicable discount rate?

• A)zero growth
• B)dividend growth
• C)capital pricing
• D)earnings capitalization
• E)discounted dividend

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Definitions:

Equity

The value of an ownership interest in a company, represented by the amount of money that would be returned to shareholders if all the assets were liquidated and all the company's debt was paid off.

Iterative

A process or procedure characterized by repetition, where subsequent iterations build upon the results of previous ones.

Debt/Interest Problem

Issues arising from the management and repayment of borrowed funds, especially when the interest expenses become difficult to manage.

Numerical Approach

A method that involves applying algorithms and numerical techniques to solve mathematical problems.