The primary difference between dividend valuation models and earnings valuation models is.

Question

Quizplus · Accepted Answer

The primary difference between dividend valuation models and earnings valuation models is that dividend models measure the investor's income stream by valuing the stream of expected dividend payments, while earnings models measure the firm's income stream by valuing the expected earnings of the company. Selecting the appropriate discount rate is important for both models, and dividends may or may not be considered in earnings models depending on the specific approach used. However, the key difference between the two types of models is the focus on either the investor's income stream or the firm's income stream.

The Primary Difference Between Dividend Valuation Models and Earnings Valuation