Show Numerically That Investment Horizon Has No Bearing on Current

question 45

Essay

Show numerically that investment horizon has no bearing on current stock price.For your illustration assume investment horizons of three versus five years and the following facts: the stock is correctly priced at $40.00, has a required return of 17 percent, a growth rate of 7 percent, and has just paid a $3.74 dividend.
Note: The variation between $40.01 and $39.98 is, of course, a rounding error.

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Definitions:

Dehydration

A condition resulting from excessive loss of body water, impairing normal bodily functions.

MDMA

3,4-Methylenedioxymethamphetamine, a synthetic drug that alters mood and perception, commonly associated with nightclub scenes and known as ecstasy.

Physiological Measures

Quantitative assessments of bodily functions used in psychological and medical research, such as heart rate or blood pressure.

Conscious Awareness

The state of being mentally alert and consciously aware of one's thoughts, feelings, and surroundings.