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Name: Nguyen Xuan ThanhStudent ID: 1235735CHAPTER 9Questions9.3/ If you bought a share of common stock, you would probably expect to receivedividends plus an eventual capital gain. Would the distribution between the dividend yieldand the capital gains yield be influenced by the firm’s decision to pay more dividendsrather than to retain and reinvest more of its earnings? Explain.
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9.4/ Two investors are evaluating GE’s stock for possible purchase. They agree on theexpected value of D1 and on the expected future dividend growth rate. Further, they agreeon the riskiness of the stock. However, one investor normally holds stocks for 2 years, whilethe other holds stocks for 10 years. On the basis of the type of analysis done in this chapter,should they both be willing to pay the same price for GE’s stock? Explain.