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Posted by: Homeworkhelp
Price Quoted by Student: $2
Posted On: 2011-03-04 07:07:20
 
Question

9-4 Two investors are evaluating GE’s stock for possible purchase.  They agree on the expected value of D1 and also on the expected future dividend growth rate.

 

Fundamentals of Financial Management By Eugene F. Brigham, Joel F. Houston 12th Ed

 

9-4 Two investors are evaluating GE’s stock for possible purchase.  They agree on the expected value of D1 and also on the expected future dividend growth rate.  Further, they agree on the riskiness of the stock.  However, one investor normally holds stocks for 2 years, while the other holds stocks for 10 years.  On the basis of the type of analysis addressed to date, should they both be willing to pay the same price for GE’s stock?


Solutions
Yes. The value of a share of stock is the PV of it
Price $2
Attachment 1: 9-4 Two investors are evaluating GE’s.doc
Solution Posted By: Homeworkhelp    Posted on: 04-03-2011