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Nexus Corps earnings and dividends are growing at 15% per year. Alpha Corps earnings and dividends are growing at 8% per year. The companies assets,
Nexus Corps earnings and dividends are growing at 15% per year. Alpha Corps 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 the Present Value of Growth Opportunities (PVGO) accounts for a greater fraction of Alpha Corps stock price. How is this possible?(Explanation in words.) (Hint: There is more than one possible explanation.)
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