Stock valuation models are dependent upon
A)expected dividends, future dividend growth, and an appropriate discount rate.
B)past dividends, flotation costs, and bond yields.
C)historical dividends, historical growth, and an appropriate discount rate.
D)All of these options

Question

Quizplus · Accepted Answer

Stock valuation models rely on future expected dividends and the rate of growth in dividends, as well as an appropriate discount rate to account for the time value of money and risk associated with the investment. Past dividends and historical growth rates may be used as a basis for estimation, but it is the future potential of the stock that ultimately determines its value. Flotation costs and bond yields are not typically relevant factors in stock valuation.

Stock Valuation Models Are Dependent Upon