The dividend-discount model of stock valuation:
A. takes the annual dividend, adds it to the expected future selling price and divides by the number of years to get the current price.
B. is an application of the net present value formula.
C. takes the net present value of the expected future price of the stock and adds the annual dividend.
D. takes the net present value of expected dividends and add it to the future sale price of the stock.
Answer: B
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Natural monopolies:
A. are the only monopolies that are efficient. B. generally earn zero accounting profits due to regulations. C. can capture the lowest production costs possible for the industry. D. are always protected by government policy.
Time lags can cause economic policy to affect the economy after the underlying problems have changed.
Answer the following statement true (T) or false (F)
A contractionary fiscal policy is a policy that:
A. reduces aggregate demand by decreasing taxes. B. reduces aggregate demand by decreasing government purchases. C. reduces aggregate demand by decreasing interest rates. D. reduces aggregate demand by decreasing money supply.
Why does it take so long for the declaration of the beginning and end of recessions in the U.S. and why is there a lack of clarity as to what is and is not a recession?
What will be an ideal response?