Stock valuation models are dependent upon:
A) expected dividends,future dividend growth,and an appropriate discount rate.
B) past dividends,flotation costs,and bond yields.
C) historical dividends,historical growth,and an appropriate discount rate.
D) cost of capital.

Question

Quizplus · Accepted Answer

Stock valuation models are based on expectations of future dividends and their growth, which are discounted back to present value using an appropriate discount rate. Past dividends, flotation costs, and bond yields are not as relevant to predicting future stock prices. The cost of capital is also important, but it is a factor included in the discount rate used in the model.

Stock Valuation Models Are Dependent Upon