Dividend models suggest that ____________ determine the value of a financial asset to which the owner is entitled while holding the asset.

Question

Quizplus · Accepted Answer

Dividend models, such as the Dividend Discount Model (DDM), focus on the present value of the expected future cash flows (dividends) that an investor will receive while holding the asset. These models do not consider past cash flows because the value is determined by the income the asset will generate in the future, not what it has generated in the past.

Dividend Models Suggest That ____________ Determine the Value of a Financial