NPV of reinvesting cash flows

1. What is the relationship between the NPV of reinvesting cash flows and the change in the price of the stock?

2. How can the DDM be used with changing growth rates in future dividends?

3. What are some drawbacks of the DDM?

4. What are share repurchases, and how can they be incorporated into the valuation of a stock?

1. What rights come with a share of stock?

2. Which two components make up the total return to an investor in a share of stock?

3. What does the DDM say about valuing shares of stock?

4. How can the DDM be used with changing growth rates in future dividends?

Solution: