Asked by Kristin Kowing on Jun 28, 2024
Verified
According to the basic DCF stock valuation model,the value an investor should assign to a share of stock is dependent on the length of time he or she plans to hold the stock.
DCF Stock Valuation Model
A method to estimate the value of a stock by using predicted cash flows and discounting them to present value.
Share of Stock
A unit of ownership in a company that entitles the holder to a proportion of the corporation's assets and profits.
- Gain insight into the foundational aspects of the dividend discount model for determining stock value.
Verified Answer
CQ
Cinthia QuirozJun 28, 2024
Final Answer :
False
Explanation :
The basic DCF (Discounted Cash Flow) stock valuation model calculates the present value of expected future cash flows, which is independent of the specific time an investor plans to hold the stock. It focuses on the intrinsic value of the stock based on its future cash flows.
Learning Objectives
- Gain insight into the foundational aspects of the dividend discount model for determining stock value.