Author Question: Dividend models suggest that the value of a financial asset is determined by the ________ the owner ... (Read 28 times)

cherise1989 · **on:** Jul 10, 2018

Dividend models suggest that the value of a financial asset is determined by the ________ the owner is entitled to while holding the asset.

A) present cash flows
B) past cash flows
C) future cash flows
D) past and present cash flows

Question 2

An increase in a firm's market risk should be reflected in what part(s) of the Gordon growth model?

A) The dividend growth rate
B) The required return
C) Next year's dividend

epscape · **Reply #1 on:** Jul 10, 2018

Answer to Question 1

Answer: C
Explanation: C) Dividend models do not focus on past and present cash flows but future cash flows, which are discounted by a required rate of return.

Answer to Question 2

B