a. Two investors are evaluating GE stock for purchase. They both agree onthe expected value of D0, g and K. However, one investor has a 2 year horizon and the other has a 5 year horizon. On the basis of the type of analysis done in this chapter, they should both be willing to pay the same price . (True or False-Explain)
b. A bond that pays interest forever and has no maturity date (perpetual or consol bond) is similar to a 1) no growth common stock and 2) a preferred stock in what ways?