Show Numerically That Investment Horizon Has No Bearing on Current

question 57

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.

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Definitions:

Nominal

Nominal refers to data that is categorized without a natural order or rank, simply identifying different types based on names or labels.

Ethnicity

Ethnicity refers to the social group a person belongs to, and identifies with, often based on cultural, religious, or national characteristics.

Interval Data

A type of data where the order of the data points is significant and the distance between them is equal and meaningful; however, it does not have a true zero point.

Nominal Data

Data classified into categories that cannot be ordered or ranked in a meaningful way, such as gender, race, or color.