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Basic Question 6 of 7
True or False? An analyst must use DDM to estimate terminal value.
User Contributed Comments 5
| User | Comment |
|---|---|
| ssradja | "must" is a key word |
| JimM | Yeah, never trust those absolute words, like "must," "always," and "never." |
| ybavly | You must absolutely never trust them! |
| shettyp | @Ybavly...LOL! |
| davidt876 | lol |
I just wanted to share the good news that I passed CFA Level I!!! Thank you for your help - I think the online question bank helped cut the clutter and made a positive difference.
Edward Liu
Learning Outcome Statements
explain the assumptions and justify the selection of the two-stage DDM, the H-model, the three-stage DDM, or spreadsheet modeling to value a company's common shares;
describe terminal value and explain alternative approaches to determining the terminal value in a DDM;
calculate and interpret the value of common shares using the two-stage DDM, the H-model, and the three-stage DDM;
explain the use of spreadsheet modeling to forecast dividends and to value common shares;
evaluate whether a stock is overvalued, fairly valued, or undervalued by the market based on a DDM estimate of value.
CFA® 2025 Level II Curriculum, Volume 3, Module 21.