The dividend discount model states that the price of a stock should reflect the present value of the stock's future dividends.

Name: The dividend discount model states that the price of a stock should reflect the present value of the stock's future dividends.
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The Dividend Discount Model (DDM) is a method of valuing a company's stock price based on the theory that its stock is worth the sum of all its future dividend payments, discounted back to their present value.

The Dividend Discount Model States That the Price of a Stock