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Basic Question 2 of 7
According to the dividend discount model the value of a stock is
B. The future value of an expected stream of future dividends.
C. The sum of all future dividends.
A. The present value of an expected stream of future dividends.
B. The future value of an expected stream of future dividends.
C. The sum of all future dividends.
User Contributed Comments 4
| User | Comment |
|---|---|
| chamad | I don't see the difference between A & C! can someone explain...thanks |
| VenkatB | The sum of all (Present Value of) future dividends C is missing the "present value" aspect |
| Oarona | well explained VenkatB |
| johntan1979 | Just recall the formula: Is V = sum of all future dividends, i.e. D1, D2, D3...? Nope, it's D/r-g |
You have a wonderful website and definitely should take some credit for your members' outstanding grades.
Colin Sampaleanu
Learning Outcome Statements
calculate and interpret the value of a common stock using the dividend discount model (DDM) for single and multiple holding periods;
CFA® 2025 Level II Curriculum, Volume 3, Module 21.