The dividend‑growth model determines what an investor thinks a stock is worth but not necessarily its price.

Question

The dividend‑growth model determines what an investor thinks a stock is worth but not necessarily its price.​

Quizplus · Accepted Answer

The dividend-growth model calculates the intrinsic value of a stock based on its expected future dividends, but it does not account for market conditions or investor sentiment, which can impact the stock's market price. Therefore, the model determines what an investor thinks a stock is worth but not necessarily its price.

The Dividend‑growth Model Determines What an Investor Thinks a Stock