Other things being equal, the larger the expected future dividends to be received from stock ownership, the higher the current stock price.

Question

Quizplus · Accepted Answer

This statement is based on the dividend discount model, which suggests that the present value of a stock is equal to the discounted value of its future expected dividends. Therefore, if the expected future dividends increase, the present value (or stock price) would also increase.

Other Things Being Equal, the Larger the Expected Future Dividends