Question

Which of the following statements is(are) true? I. Dividend payments represent a cash flow to the owner of a stock. II. The present value of a stock’s cash flows determine the price of a stock

Answer 1

Both Statements are True

Step-by-step explanation:

Both statements are true

I. Dividend is the payment of earning of the company to the stockholders of the company. So it is true that the dividend payments represents a cash flow to the owner of a stock.

II. The price of the stock can be calculated by determining present value of all cash flows relating to stock. So, the II statement is also true.