3. Dividend discount models Suppose Mr. Galego just bought a share of CleanAir Co., a renewable energy startup. CleanAir promises to pay Mr. Galego $16 in dividends for one year and then the firm will shut down. Suppose that the liquidation value of the share is $3, and the rate of time preference is 7%. Then, according to the single period dividend discount model, the present value of the cash payment received by Mr. Galego in one year would be $17.76 , which means that the market price of the share of stock is $17.76 . True or False: In multiperiod dividend discount models, the value of a share is assumed to be the discounted value of the dividends that the share will pay the shareholder. True False Grade it Now Save & Continue Continue without saving