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Assume that we have companies and they are fixed in size.They have constant earnings,and also they are paying out all earning as dividens.Company 1 is
Assume that we have companies and they are fixed in size.They have constant earnings,and also they are paying out all earning as dividens.Company 1 is paying dividend(constant) $2/share every quarter.Company 2 is paying dividend(constant) $3/share every quarter.Also,every comapanys stock price is present value of its future dividend stream.
a)will be company 2 stock price twice as high compare to company 1?YES/NO
b)will be company company 2 PE ratio twice as high compare to company 1?YES/NO
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