Stock Valuation - The Dividend-Discount Model
3 important questions on Stock Valuation - The Dividend-Discount Model
What are the two possible sources of cash flow with owning a stock?
dividend
selling the stock
selling the stock
What does the dividend-discount model value?
The shares of a firm according to the PV of the future dividends the firm will pay
What to what is the price of a stock equal when the holding period is forever?
The PV of all the expected future dividends it will pay
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