In financial economics models,a stock price is approximately equal to the:
A)corporate value of the company.
B)value of current corporate profits.
C)present discounted value of expected future profits.
D)results of complicated accounting formulae.
E)future value of expected future revenues.

Question

Quizplus · Accepted Answer

In financial economics models, the stock price is usually determined by the present discounted value of expected future profits. This takes into account the company's expected future cash flows and incorporates the time value of money through discounting. It is the most commonly used approach to valuing stocks in financial analysis.

In Financial Economics Models,a Stock Price Is Approximately Equal to The