In the one-period valuation model with no dividend payments the current price of the stock is given by ________.
A)P₀ =
B)P₀ = +
C)P₀ = × 100
D)P₀ = × 365

Question

In the one-period valuation model with no dividend payments the current price of the stock is given by ________.
A)P₀ = 
B)P₀ = + 
C)P₀ = × 100 
D)P₀ = × 365

Quizplus · Accepted Answer

The one-period valuation model with no dividend payments is given by P₀ = (1 + r) × E₁, where P₀ is the current stock price, r is the required rate of return, and E₁ is the expected stock price at the end of the period. Therefore, the correct formula for the current price of the stock is: P₀ = 11ea56dd_a3a8_2bba_b842_5b63b734b4a3_TB5039_11.

In the One-Period Valuation Model with No Dividend Payments the Current