What is a method for valuing stock in a company that does not pay dividends?
A)clean surplus relationship
B)economic value added
C)residual income model
D)payout-retention model
E)no-dividend valuation method

Question

Quizplus · Accepted Answer

The residual income model is a method for valuing stock in a company that does not pay dividends. This model values a company based on its ability to generate income above a required rate of return on its assets. It takes into account the company's cost of capital and the value of future cash flows. This method is useful for companies that reinvest profits instead of paying dividends.

What Is a Method for Valuing Stock in a Company