Question #38
Reading: Reading 19 Equity Valuation - Applications and Processes
PDF File: Reading 19 Equity Valuation - Applications and Processes.pdf
Page: 13
Status: Incorrect
Correct Answer: B
Your Answer: B
Question
An ownership perspective can be important for an analyst determining the value of a share position. A controlling interest suggests the most appropriate model is a:
Answer Choices:
A. cash flow model
B. dividend discount model
C. time series model
Explanation
A controlling interest suggests a cash flow model may be most appropriate since the
controlling interest would allow the purchaser to set dividend policy.