Stock Valuation - The Dividend-Discount Model

3 important questions on Stock Valuation - The Dividend-Discount Model

What are the two possible sources of cash flow with owning a stock?

dividend
selling the stock

What does the dividend-discount model value?

The shares of a firm according to the PV of the future dividends the firm will pay

What to what is the price of a stock equal when the holding period is forever?

The PV of all the expected future dividends it will pay

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