Which One Of The Following Is An Underlying Assumption Of The Dividend Growth Model?

(Correct Answer Below)

Which One Of The Following Is An Underlying Assumption Of The Dividend Growth Model?

Answer A stock has the same value to every investor. A stock's value is equal to the discounted present value of the future cash flows which it generates. A stock's value changes in direct relation to the required return. Stocks that pay the same annual dividend have equal market values. The dividend growth rate is inversely related to a stock's market price.
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A stock's value is equal to the discounted present value of the future cash flows which it generates.

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