Which of the following can be considered discounted cash flow methods of stock valuation?
I. The constant growth dividend valuation model
II. The variable growth dividend valuation model
III. The price to cash flow method
IV. The cash flow to equity method
A) I, II, and IV only
B) II, III, and IV only
C) I, II, and III only
D) I, II, III, and IV

Question

Quizplus · Accepted Answer

The constant growth dividend valuation model and the variable growth dividend valuation model both directly use discounted cash flow (DCF) techniques by discounting future dividends to present value. The cash flow to equity method also uses DCF by discounting future cash flows available to equity holders. The price to cash flow method, however, is a ratio-based valuation and does not directly involve discounting cash flows to their present value.

Which of the Following Can Be Considered Discounted Cash Flow