Part 3 Stocks and prin (7-2) Two investors are evaluating General Electric's stock for possible purchase. They agree on the expected value of D, and also on the expected future dividend growth rate. Further, they and the other normally holds stocks for 10 years. On the basis of the type of analysis agree on the risk of the stock. However, one investor normally holds stocks for 2 years done in this chapter, they should both be willing to pay the same price for General Electric's stock. True or false? Explain. (7-3) A bond that pays interest forever and has no maturity date is a perpetual bond, also called a perpetuity or a consol. In what respect is a perpetual bond similar to (1) a no-growth common stock and (2) a share of preferred stock? (7-4) Explain how to use the free cash flow valuation model to find the price per share of common equity. ST PROBLEMS SOLUTIONS SHOWN IN APPENDIYA