Accounting · Financial Management
Which of the following statements about business valuation methods is true?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The price/earnings ratio method divides earnings by the price/earnings ratio
- 2The dividend valuation model assumes that the growth rate of future dividends is constant✓
- 3The equity market value is the number of shares multiplied by the share price plus the market value of debt
- 4The earnings yield method multiplies earnings by the earnings yield
Correct answer
The dividend valuation model assumes that the growth rate of future dividends is constant
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