Neither the P/E approach nor the cash flow to equity approach rely on dividends as the key input into the valuation of a stock.

Question

Quizplus · Accepted Answer

The P/E (Price-to-Earnings) approach focuses on the relationship between a company's stock price and its earnings per share, while the cash flow to equity approach values a stock based on the cash flows available to equity shareholders after all expenses and debts have been paid. Neither method relies directly on dividends as the primary input for stock valuation.

Neither the P/E Approach nor the Cash Flow to Equity