1. The value of a supernormal growth stock is the present value of the mixed growth...
1. The value of a supernormal growth stock is the present value of the mixed growth dividend payments and the present value of the constant-growth dividend payments. true or false
2. The constant-growth stock has dividends growing at a constant rate over time. true or false?
3.The yield to maturity of a bond is the discount rate that makes the present value of the coupon and principal payments equal to the price of the bond. true or false
Homework Answers
1)
TRUE
Value of a stock is always the present value of its future dividends. therefore, value will be equal to present value of its mixed and fixed stream of dividends.
2)
TRUE
A constant growth stock will have its dividends grow at a constant rate overtime.
3)
TRUE
Price of a bond is equal to present value its cash flows discounted at its yield to maturity.
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1. The value of a supernormal growth stock is the present value
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Please answer in electronic text. Thank you!
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Please answer in electronic text. Thank you!
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