Fay Thomas, a financial analyst, once remarked, Even if your dividend estimates and discount rate are correct, dividend discount models identify stocks that will produce positive risk adjusted returns only if other investors eventually come to agree with the DDM 's valuation conclusions Is Fay 's s...

Fays statement is incorrect The DDM provides an impli ...

Fay Thomas, a financial analyst, once remarked, Even if your dividend estimates and discount rate are correct,

Question:

Fay Thomas, a financial analyst, once remarked, "Even if your estimates and are correct, discount models identify that will produce positive risk-adjusted returns only if other investors eventually come to agree with the DDM's valuation conclusions." Is Fay's statement correct? Why?
Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing... Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...