The SML approach can be applied to more ﬁrms than the dividend growth model can.

Question

Quizplus · Accepted Answer

The SML approach uses the CAPM model, which takes into account factors beyond just dividend payments, such as the company's risk level and the overall market's expected return. This makes it applicable to a wider range of companies than the dividend growth model, which relies heavily on a company's past and expected future dividend payouts.

The SML Approach Can Be Applied to More ﬁRms Than