Ironclad formula for projecting future dividend growth

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Reference no: EM13879604

Scenario: Bob and I are looking at AT&T's stock because we are both very wealthy stock market investors. We usually spend summers together in the Swiss Alps (at his expense…you see, he likes me and we are pals). We agree on the expected dividend AT&T will be paying. For your information, Bob has come up with an ironclad formula for projecting future dividend growth. He has franchised this information and made over $20 million on the formula in the last four years. We also agree on the level of risk for the stock (I had to buy this formula from him also). I hold my stock for two years. Bob holds his stocks for 10 years. The question is, should we or should we not pay the same price for the stock? Why or why not? (I've just got to make more than he does this year.)

Reference no: EM13879604

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Ironclad formula for projecting future dividend growth : Bob and I are looking at AT&T's stock because we are both very wealthy stock market investors. We usually spend summers together in the Swiss Alps (at his expense…you see, he likes me and we are pals). We agree on the expected dividend AT&T will be p..

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