conomics theory tells us that the value of a stock is equal to the expected cash lows an investor expects to receive from it over his/her time horizon. MIDN lane Doe is deciding to invest part of her 2/C loan proceeds in one of the two stocks discussed below. She expects to sell the investment in 10 years. Jane believes her opportunity cost to be 8% as she could put her money into mutual funds and thinks she could make that much per year for the 10 years. The below are the characteristics of each stock. What is the most she should be willing to pay for each today (on a per share basis)? Stock A, The Steady Eddie Company, is growing roughly at the rate of inflation. It is paying a dividend of $1.50 per share today, and the dividend is also growing at 3% per year (next year's dividend is expected to be $1.55; the following year, $1.59, and so on) Given the growth of the overall stock market, Steady Eddie's Beta and Jane's Ouija Board, Jane expects a share of Steady Eddie to sell for $90 per share in 10 years. Assume that Jane receives her normal dividend payment just before she sells the stock Stock B, The Air Car Company, is a startup developing an electric flying car. It is plowing all its available cash into R&D and doesn't expect to pay a dividend anytime in the foreseeable future. However, because the market prospects for a successful implementation of this technology are so bright, it has a significant upside compared to the general market (high Beta) and the Ouija Board predicts great things. Jane believes the stock will have a value of $400 per share in 10 years as the flying car enters production What is the most Jane should pay for either Stock A or Stock B today given the above market evaluation. Assume the values quoted are Jane's best information and that taxes are not a concern What makes you uncomfortable (if anything) about this analysis methodology? Two-three sentences will suffice here