The valuation of a common stock today primarily depends on:
A)the number of shares outstanding and the number of its shareholders.
B)its expected future dividends and its discount rate.
C)Wall Street analysts.

Question

Quizplus · Accepted Answer

The valuation of a common stock today primarily depends on its expected future dividends and its discount rate, as these factors determine the present value of the stock's cash flows. The number of shares outstanding and the number of shareholders may impact the stock's liquidity, but these factors do not directly determine its valuation. Wall Street analysts may provide recommendations and opinions on a stock, but their views do not necessarily reflect the true value of the stock.

The Valuation of a Common Stock Today Primarily Depends On