The value of a stock increases as:

Question

Quizplus · Accepted Answer

The value of a stock is calculated using the discounted cash flow (DCF) model, which takes into account the expected future cash flows (dividends) and the required rate of return. If the required rate of return decreases, the present value of future cash flows will increase, leading to an increase in the stock price. Similarly, as the dividend growth rate increases, the expected future cash flows will increase, leading to an increase in the stock price. Therefore, both a and c are correct choices.

The Value of a Stock Increases As