Question
About dividend and DDM, which statements are CORRECT? Check all that apply: 1.By Dividend Discount Model (DDM), if a company is expected to never ever
About dividend and DDM, which statements are CORRECT?
Check all that apply:
1.By Dividend Discount Model (DDM), if a company is expected to never ever pays any cash in the future, its stock should be worth zero
2.Other variables held constant, there is an inverse relation between stock prices and interest rates
3.Stocks that don't pay dividend, such as, Amazon, Google, Facebook, etc., still have huge value. This contradicts DDM model
4.The stock price computed by DDM is ex-dividend price, meaning the price prior to the current dividend being paid out
5.In DDM, the risk-adjusted discount rate can be used as cost of equity
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