In theory, the price of a stock equals the:

Question

Quizplus · Accepted Answer

The price of a stock represents the present value of expected future dividend payments. This is because the value of a stock is based on its ability to generate cash flows for its shareholders, and typically, the primary cash flow that shareholders receive from owning a stock is through dividend payments. Therefore, the price of a stock will reflect the present value of expected future dividend payments, discounted to their present value using an appropriate discount rate.

In Theory, the Price of a Stock Equals The