The Method of Valuing a Stock Based on the Present

question 32

Multiple Choice

The method of valuing a stock based on the present value of the future income derived from that stock is called:

• A)technical analysis.
• B)constant valuation.
• C)the basic stock valuation method.
• D)compound dividend analysis.
• E)the dividend discount model.

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Definitions:

Internal Consistency

The extent to which different test items that propose to measure the same general construct obtain similar scores.

Odd-even Reliability

A measure of internal consistency reliability, where a test is split into odd and even items and the scores are correlated.

Construct Validity

The degree to which a test measures what it claims to be measuring, specifically in terms of whether the test actually assesses the theoretical construct it is designed to measure.

Predictive Validity

The level at which a score from a test or scale forecasts subsequent performance on a connected result.