Which of the following is not a problem with using a dividend-based valuation formula?
A) Dividends are arbitrarily established.
B) Dividends represent a transfer of wealth to shareholders.
C) Some firms do not pay a regular periodic dividend.
D) It is a challenge to forecast the final liquidating dividend.

Question

Quizplus · Accepted Answer

Dividends representing a transfer of wealth to shareholders is not a problem with dividend-based valuation; it is actually a fundamental aspect of dividends. The other options highlight issues such as arbitrary dividend policies, lack of regular dividends, and forecasting challenges.

Which of the Following Is Not a Problem with Using