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NEW QUESTION: 1
The dividend discount model values a share of stock as
A. the sum of all expected future dividend payments.
B. the sum of all expected future cash flows, where these cash flows are adjusted for risk and time value of money.
C. the sum of all future cash flows adjusted for time value of money.
Answer: B
Explanation:
The value of any asset is the present value of its expected future cash flows discounted at the appropriate rate of return.