The stock price is equal to the present value of all future cash flows from the...
The stock price is equal to the present value of all future cash flows from the stock discounted at ________________________. In other words, what do we call the rate at which we discount the future dividends?
Homework Answers
The stock price is equal to the present value of all future cash flows from the stock discounted at the required rate.
This required rate is determined by the investors and is combination of external investors.
Required rate of return by investors is known as rate at which we discount the future dividends. It is laso called the cost of capital for the firm.
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