If two stocks have the same earnings per share and required rate of return, differences in the ____________ of the two companies can account for different stock prices.

Question

Quizplus · Accepted Answer

Growth opportunities can significantly impact a company's future earnings and cash flows, which in turn affect its stock price. Stocks with higher growth prospects are typically valued higher than those with lower growth prospects, even if their current earnings per share and required rates of return are the same.

If Two Stocks Have the Same Earnings Per Share and Required