Relatively small changes in inputs used in DDM can change the estimated value by large percentage amounts.

Name: Relatively small changes in inputs used in DDM can change the estimated value by large percentage amounts.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The estimated value in DDM is highly sensitive to changes in inputs such as the growth rate, discount rate, and dividends. Small changes in these inputs can result in significant changes in the estimated value of the stock. Therefore, the statement is true.

Relatively Small Changes in Inputs Used in DDM Can Change