In the generalized dividend model,if the expected sales price is in the distant future
A)it does not affect the current stock price.
B)it is more important than dividends in determining the current stock price.
C)it is equally important with dividends in determining the current stock price.
D)it is less important than dividends but still affects the current stock price.

Question

Quizplus · Accepted Answer

In the generalized dividend model, the current stock price is primarily determined by the present value of expected future dividends. The expected sales price in the distant future has little impact on the current stock price because its present value is negligible when discounted back to the present.

In the Generalized Dividend Model,if the Expected Sales Price Is