Belief in future dividends is the only long-term value of stock
Standard financial valuation models, such as dividend discount and discounted cash flow models, define the fundamental long-term value of a stock as the present value of its future distributions to shareholders.
The claim represents a fundamental tenet of financial economics: the intrinsic or long-term economic value of a share of stock is derived from the future cash distributions (dividends or cash flows) it will yield to the investor. Papers [8] and [9] explicitly discuss these valuation frameworks (Dividend Discount Models and Discounted Cash Flow models) as the foundational approach to asset valuation. None of the other papers refute this premise; they deal with other financial topics such as ESG performance, fast-food market trends, tobacco investments, and AI prediction models. Therefore, the claim is supported by standard financial theory.
Syrgak Kydyraliev, Anarkül Urdaletova. Stock Valuation: Dividend Discount Models. 2011. https://doi.org/10.36880/c02.00370
Stock Valuation: Dividend Discount Models establishes that the estimated value of an asset equals the present value of its future cash flows and dividends.
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Qiuru Tang. Comparison of The Dividend Discount Model and The Discounted Cash Flow Model Valuation of Stock Kweichow Moutai. 2024. https://doi.org/10.54097/rxyseb84
Comparison of The Dividend Discount Model and The Discounted Cash Flow Model Valuation of Stock Kweichow Moutai confirms that dividend discount and cash flow models are the standard foundational tools used to determine the intrinsic value of stocks.
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