Which of the following is a problem using the dividend discount model to value common stock?
A)The model does not account for the risk of the stock.
B)The model does not consider the present value of the dividends.
C)The model does not consider that dividends may not be paid
D)The model does not account for small dividends.

Question

Quizplus · Accepted Answer

The dividend discount model assumes that dividends will be paid consistently, but it does not account for the possibility that a company may not pay dividends in the future.

Which of the Following Is a Problem Using the Dividend