Neither the P/E Approach nor the Dividends-And-Earnings Approach Rely on Dividends

question 63

True/False

Neither the P/E approach nor the dividends-and-earnings approach rely on dividends as the key input into the valuation of a stock.

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Definitions:

Opportunity Cost

The financial implication of not selecting the following best possibility when faced with a decision.

Interest

The cost of borrowing money, typically expressed as a percentage of the amount borrowed, paid by borrowers to lenders.

Savings Account

A deposit account held at a bank or other financial institution providing principal security and a modest interest rate.

Opportunity Cost

The deficit of potential benefits that could be reaped from alternative options when one is picked.