Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Which statement is NOT correct? According to DDM formula, there is a one period lag between the times of stock price and the dividend payment.
Which statement is NOT correct? According to DDM formula, there is a one period lag between the times of stock price and the dividend payment. According to DDM, the discount rate should be greater than the growth rate of dividends. If the payout ratio is fixed, the growth rates of earnings and dividends are the same. As the payout ratio goes up, the stock price also goes up. DDM can be used to calculate the terminal value
Step by Step Solution
There are 3 Steps involved in it
Step: 1
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