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The constantdashgrowth valuation model is based on the premise that the value of a share of common stock is​ ________. A. determined based on an industry standard​ P/E multiple B. the sum of the dividends and expected capital appreciation C. determined by using a measure of relative risk called correlation coefficient D. equal to the present value of all expected future dividends

Respuesta :

Answer:

The correct answer is letter "D": equal to the present value of all expected future dividends.

Explanation:

The Constant-Dash-Growth Valuation or the Gordon Growth Model is used to calculate the intrinsic value of a stock today based on the stock's expected future dividends. It is widely used by investors and analysts to compare the predicted stock value against the actual market price. The difference between them may determine if the stock is overvalued or undervalued by the market.

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