Answer:
The expected future dividends, capital gains and the discount rate
Explanation:
Value of a common stock refers to it's current market price as on today. A stock's current market price is an outcome of the present value of it's future stream of income generation in the form of dividend income i.e dividend yield and capital appreciation i.e capital gain yield.
For the purpose of calculation of present value of a stock, an investor's required rate of return denoted as [tex]K_{e}[/tex] is required which is used as the discounting rate.
Hence, a stock's current market price is the present value of it's expected future dividends, capital gain yield and the discount rate i.e cost of equity.
