In the dividend discount model, which of the following are not incorporated into the discount rate?
A) Real risk-free rate
B) Risk premium for stocks
C) Return on assets
D) Expected inflation rate

Question

Quizplus · Accepted Answer

The discount rate in the dividend discount model incorporates the real risk-free rate, a risk premium for stocks, and the expected inflation rate, but not the return on assets. The return on assets is a measure of a company's profitability relative to its total assets and is not directly related to the discount rate used in this model.

In the Dividend Discount Model, Which of the Following Are