Expected future dividends and expected future growth rate

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Two investors are considering purchasing Coca-Cola's stock. They agree on the expected future dividends and the expected future growth rate. Further they are on agreement on the riskiness of the stock and the associated required rate of return. However Investor A plans to hold the stock only one year while Investor B plans to hold the stock 10 years. On the basis of the type of analysis done in this chapter which investor would be willing to pay the most for the stock?

a. Investor A

b. Investor B

c. Neither, they would pay the same amount.

d. Impossible to tell with out knowing the current stock price.

Reference no: EM131448279

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