Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Apr 19, 2024

Some company stocks do not pay dividends. If the dividend discount model is correct, why aren't no dividend stocks selling at zero? explain the answer

Some company stocks do not pay dividends. If the dividend discount model is correct, why aren't no dividend stocks selling at zero?

explain the answer in details. Thank you!

Step by Step Solution

There are 3 Steps involved in it

Step: 1

The Dividend Discount Model DDM is a method used to value a companys stock by estimating its future dividends ... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

Step: 3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Corporate Finance Core Principles and Applications

Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan

5th edition

1259289907, 978-1259289903

More Books

Students also viewed these Finance questions

Question

★★★★★

First, spend a couple of sentences summarizing the Concepts in the article below ? Then, answer the following. In the Concepts in Article, the speaker mentioned, "A stock is fundamentally more...

Answered: 1 week ago

Question

★★★★★

1 What are the main components of personal financial planning? Solve What is the purpose of a financial plan? Solve Identify some common actions taken to achieve financial goals. How does a job...

Answered: 1 week ago

Question

★★★★★

In this task, we will apply the Dividend Discount Model (DDM) to analyze the effect of the interest rate on the valuation of shares. We must also make connections to reality, but be aware then that...

Answered: 1 week ago

Question

★★★★★

2. There are different kinds of statistical analyses, and you will need to use one that is best suited to the data available and the information you need to collect in the given scenario (Good Days)....

Answered: 1 week ago

Question

★★★★★

We have seen in Example 7.1.7 that Thomae's function is inR[0, 1] with integral equal to 0. Can the Fundamental Theorem 7.3.1 be used to obtain this conclusion? Explain your answer.

Answered: 1 week ago

Question

★★★★★

LO 3-1 Brett is a waitperson at a diner in Vermont. Brett earns the tipped minimum wage. During a 40-hour workweek in February 2023, how much must Brett earn in tips to satisfy the minimum wage...

Answered: 1 week ago

Question

★★★★★

Identify two assumptions that traditional financial models make about individual investment behavior and discuss their impact.

Answered: 1 week ago

Question

★★★★★

The financial statements of Marks and Spencer plc (M&S) are available at the books companion website or can be accessed at corporate.marksandspencer....

Answered: 1 week ago

Question

★★★★★

What are the types of audit report?

Answered: 1 week ago

Question

★★★★★

The total liabilities of Splish Brothers Inc. decreased by $85000 during the month of August 2022. Stockholders equity increased by $36000 during this period. By what amount and in what direction...

Answered: 1 week ago

Question

★★★★★

Exercise 14-36 (Algo) Comparing Business Units Using Economic Value Added (EVA) (LO 14-4) Lauderdale Corporation is organized in three geographical divisions (regions) with managers responsible for...

Answered: 1 week ago

Question

★★★★★

make a copy of Capstone project (task_manager.py) and save it in the Dropbox folder for this project. Also, copy and paste the text files (user.txt and tasks.txt) that accompanied the previous...

Answered: 1 week ago

Question

★★★★★

1. You have been asked to review the valuation of Santiago Cement, a small Peruvian cement company, by an M&A analyst, for acquisition by a US cement company. The analyst has estimated a value of 1...

Answered: 1 week ago

Question

★★★★★

An owner investment of a building, valued at $100,000 with an $80,000 outstanding mortgage, transferring this asset into the business would O A. increase shareholders' equity by $20,000 OB. increase...

Answered: 1 week ago

Question

★★★★★

Politics ____ a set of activities performed in every country. is are A and B some other option

Answered: 1 week ago

Question

★★★★★

The amount of sales tax collected by a company is recorded as a sale credit to cash sales tax payable accounts receivable The amount of sales tax collected by a company is recorded as a sale credit...

Answered: 1 week ago

Question

★★★★★

Data on weekday exercise time for 20 females, consistent with summary quantities given in the paper An Ecological Momentary Assessment of the Physical Activity and Sedentary Behaviour Patterns of...

Answered: 1 week ago

Question

★★★★★

Treasury Bonds is it true that a U.S. Treasury security is risk-free?

Answered: 1 week ago

Question

★★★★★

After extensive research and development, Good-week Tires Inc. has recently developed a new tire, the Super Tread, and must decide whether to make the investment necessary to produce and market it....

Answered: 1 week ago

Question

★★★★★

Essence of Skunk Fragrances, Ltd., sells 3,500 units of its perfume collection each year at a price per unit of $395. All sales are on credit with terms of 1/10, net 40. The discount is taken by 70...

Answered: 1 week ago

Question

★★★★★

To shorten the time it takes him to make his favorite pizza, a student designed an experiment to test the effect of sugar and milk on the activation times for baking yeast. Specifically, he tested...

Answered: 1 week ago

Question

★★★★★

A figure skater tried various approaches to her Salchow jump in a designed experiment using 5 different places for her focus (arms, free leg, midsection, takeoff leg, and free). She tried each jump 6...

Answered: 1 week ago

Question

★★★★★

A student interested in improving her dart-throwing technique designs an experiment to test 4 different stances to see whether they affect her accuracy. After warming up for several minutes, she...

Answered: 1 week ago

Previous Question Next Question