Present value of its future dividend stream

Reference no: EM133290523

Question: Assume that we have companies and they are fixed in size.They have constant earnings,and also they are paying out all earning as dividens.Company 1 is paying dividend(constant) $2 for share every quarter.Company 2 is paying dividend(constant) $3 per share every quarter.Also,every comapanys stock price is present value of its future dividend stream.

a) will be company company 2 and their stock twice higher compare to company 1?

b) will be company company 2 and their PE ratio twice higher compare to company 1

Reference no: EM133290523

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