Alpha Corps earnings and dividends are growing at 15% per year. Beta Corps earnings and dividends are

Question:

Alpha Corp’s earnings and dividends are growing at 15% per year. Beta Corp’s earnings and dividends are growing at 8% per year. The companies’ assets, earnings, and dividends per share are now (at date 0) exactly the same. Yet PVGO accounts for a greater fraction of Beta Corp’s stock price. How is this possible? ( Hint: There is more than one possible explanation.)

AppendixLO1

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question
Question Posted: