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Use the Following Two Statements to Answer This Question

Question 21

Multiple Choice

Use the following two statements to answer this question:
I.The Dividend Discount Model (DDM) assumes that common shares are valued according to the present value of their expected future dividends.
II.The DDM argues that the selling price at any point (say, time n) will equal the present value of all the expected future dividends from period n to infinity.


A) I is incorrect, II is correct.
B) I is correct, II is incorrect.
C) I and II are incorrect.
D) I and II are correct.

Correct Answer:

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