9. Constant-growth DCF model (S4.4) Consider three investors: a. Mr. Single invests for one year. b. Ms.

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9. Constant-growth DCF model (S4.4) Consider three investors:

a. Mr. Single invests for one year.

b. Ms. Double invests for two years.

c. Mrs. Triple invests for three years.

Assume each invests in company Z (see Problem 8). Show that each expects to earn a rate of return of 8% per year.

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PROBLEM SETS Chapter 4 Valuing Stocks 113

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