The Valuation Principle States That the Value of a Stock

question 21

True/False

The Valuation Principle states that the value of a stock is equal to the present value (PV) of both the dividends and future sale price of that stock which the investor will receive.

---

Definitions:

Observations

The act of watching carefully with attention to details for the purpose of gathering data.

Experiment

A scientific procedure undertaken to test a hypothesis by manipulating and measuring variables to observe the effect.

Independent T-tests

A statistical test that compares the means of two independent groups in order to determine if there is a statistically significant difference between them.

Statistical Difference

A significant change or discrepancy between groups or conditions that is unlikely to have occurred by chance.