The Dividend-Discount Model of Stock Valuation

question 87

Multiple Choice

The dividend-discount model of stock valuation:

• A)Is an application of the net present value formula
• B)Takes the net present value of expected dividends and add it to the future sale price of the stock
• C)Takes the net present value of the expected future price of the stock and adds the annual dividend
• D)Takes the annual dividend, adds it to the expected future selling price and divides by the number of years to get the current price

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