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Assuming you are a business owner with different shareholders. How may zero growth stock valuation and constant stock valuation affect your business operations?

Respuesta :

As a business owner, the zero-growth stock valuation will be less preferred than the constant stock valuation because:

  • it is eroded by inflation
  • it does not grows over years.

What is the zero-growth stock valuation?

The stock valuation holds that the dividend paid to a shareholder will remain the same set amount until it matures.

What is the constant stock valuation?

The stock valuation holds that the dividends paid by the company will continue to go up at a constant growth rate indefinitely.

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