The only reliable way to value a common stock is to discount the future flow of dividends at a discount rate appropriate to the riskiness of the company.

Question

Quizplus · Accepted Answer

While the dividend discount model is one method to value a stock, other methods like the discounted cash flow model, price-to-earnings ratio, and market comparables are also widely used and can be reliable depending on the context.

The Only Reliable Way to Value a Common Stock Is