A dividend-focused investor uses the DDM to see how much of a share's price is supported by future:
ADividends
BDiscounts
CDeposits
DDeductions
Answer & Solution
Correct answer: A. Dividends
1. The model values nothing except the dividend stream.
2. Any price above that rests on something else.
3. So it shows the part supported by future dividends.
_Source: OpenStax Principles of Finance 2e, Chapter 11, Stocks and Stock Valuation._
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