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.
Note: The variation between $40.01 and $39.98 is, of course, a rounding error.

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The Answer of 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.
Note: The variation between $40.01 and $39.98 is, of course, a rounding error.

Show Numerically That Investment Horizon Has No Bearing on Current