Larraza is incorrect because Graham and Dodd determined the value of a security based on an analysis of the firm’s income statement and balance sheet. The dividend discount framework was advanced by John Burr Williams. Wewege is incorrect because the financial statement analysis approach put forth by Graham and Dodd is the forerunner of modern relative valuation models. Williams’ approach provided the foundation for modern dividend discount and free cash flow models, which are absolute valuation models |
