Valuing cash flows with infinite growth in the dividend discount models (DDMs): a. cannot be calculated because growth to infini

Question

1 year ago

6

Valuing cash flows with infinite growth in the dividend discount models (DDMs): a. cannot be calculated because growth to infini

ty is immeasurable b. may only be calculated if growth is 3.0% or less c. may not be calculated using any DDM unless growth is less than the discount rate d. will include the value of dividends received far in the future even though they may have PVs close to zero

Business

1 answer:

Tanzania [10] · Answer 1 · 2023-06-03T15:09:26+03:00

Option C is correct. Valuing cash flows with infinite growth in the dividend discount models (DDMs may not be calculated using any DDM unless growth is less than the discount rate.

<h3>How do you value cash flows?</h3>

In order to carry out the value of cash what a person has to do would be to get the present value of the cash in the flow and then add them up.

Hence the answer to the question that we have here is option C. Valuing cash flows with infinite growth in the dividend discount models (DDMs may not be calculated using any DDM unless growth is less than the discount rate.