In the dividend discount model, all of the following factors influence an investor's required rate of return EXCEPT

Question

Quizplus · Accepted Answer

The dividend discount model uses the expected dividend payment and the investor's required rate of return to determine an equity's intrinsic value. Factors that influence the required rate of return include the real risk-free rate, the risk premium for stocks, and the expected rate of inflation. The return on assets, however, is not relevant to an investor's required rate of return for equities.

In the Dividend Discount Model, All of the Following Factors