The constant-growth valuation model is based on the premise that ...

[chandani]

The constant-growth valuation model is based on the premise that the value of a share of common stock is ________.
 
  A) the sum of the dividends and expected capital appreciation
  B) determined based on an industry standard P/E multiple
  C) determined by using a measure of relative risk called correlation coefficient
  D) equal to the present value of all expected future dividends

Question 2

In computing after-tax operating cash flows, both operating costs and financing costs must be deducted from any cash inflows received.
 
  Indicate whether the statement is true or false

[hanadaa]

Answer to Question 1

D

Answer to Question 2

FALSE

[chandani]

Thank you

[hanadaa]

No problemo