In a general sense, the value of any asset is the
A) value of the dividends received from the asset.
B) present value of the cash flows expected to be received from the asset.
C) value of past dividends and price increases for the asset.
D) future value of the expected earnings discounted by the asset's cost of capital.

Question

Quizplus · Accepted Answer

The present value of the cash flows expected to be received from the asset reflects the discounted value of all expected future cash flows. This method is commonly used to evaluate assets and determine their intrinsic value. The other choices, such as dividends and past price increases, may be factors in the valuation process but are not the primary determinant of the asset's value.

In a General Sense, the Value of Any Asset Is