Two analysts are calculating the value of the same stock
Two analysts are calculating the value of the same stock. They projections
for the stock’s future dividends are the same. They also use the same discount rate.
However, one analyst discounts future dividends to calculate the price, whereas the other analyst discounts next periods dividends and price (again based on future dividends) to calculate the price.
The prices calculated by the two analysts will be:
Question 6 options:
different only if the dividends are increasing with time.
different only if the dividends are decreasing with time.
different or the same, there is not enough information to decide.
the same.
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