Which of the following models directly values all of the firm's equity, rather than a single share?
I. Dividend-discount model
II. Total payout model
III. Discounted cash flow model
A) I only
B) II only
C) III only
D) II and III

Question

Quizplus · Accepted Answer

The Total Payout Model values all of the firm's equity by summing the present value of all expected future cash flows to equity holders, including dividends and share repurchases. The Dividend-discount model values a single share based on the present value of expected dividend payments, while the Discounted Cash Flow model values the entire firm based on the present value of expected future cash flows to the firm itself.

Which of the Following Models Directly Values All of the Firm's