In Contrast to the FCFE Approach, the Dividend Discount Model

question 63

Multiple Choice

In contrast to the FCFE approach, the dividend discount model (DDM) approach values

• A) cash flows that are available for distribution to stockholders.
• B) the stream of cash flows that stockholders expect to receive through dividend payments.
• C) cash flows that remain after payments to all lenders.
• D) None of the above.

---

Definitions:

Manufacturing Industry

The sector of the economy that is involved in the production of goods using raw materials and machinery.

Largest Number

Refers to the highest or most significant figure in a given set or range of numbers.

Restructured Partnership

A partnership that has undergone changes in its structure, such as its organization, management, or financial arrangements, to improve efficiency or adapt to new conditions.

Business Termination

The process of permanently closing a business, involving the settling of debts, distribution of remaining assets, and legal formalities.