Asked by Elizabeth Offer on Apr 27, 2024
Verified
The _______ is defined as the present value of all cash proceeds to the investor in the stock.
A) dividend-payout ratio
B) intrinsic value
C) market-capitalization rate
D) plowback ratio
Intrinsic Value
The perceived or calculated value of a company, stock, currency, or product determined through fundamental analysis without reference to its market value.
Cash Proceeds
The amount of money received from a transaction, often from the sale of assets or securities.
- Measure the essential valuation of equities through the application of dividend discount formulas.
Verified Answer
EK
Edward KarminMay 02, 2024
Final Answer :
B
Explanation :
The intrinsic value of a stock is defined as the present value of all future cash flows to the investor, which includes dividends and the sale price of the stock. This concept is fundamental in finance and investing, as it represents the true value of the stock based on its expected future cash flows, rather than its current market price.
Learning Objectives
- Measure the essential valuation of equities through the application of dividend discount formulas.