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What can you say about the value of a stock with constant dividend growth where the growth rate is larger than the discount rate

User Skoky
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Answer:

Assuming that the growth rate of Company A' stock is larger than the discount rate this means that the stock price will be a negative value.

The implication is that the stock price is higher in comparison to the earnings. Perhaps, the entity is a newly launched organization that has not accumulated enough in earnings.

Explanation:

A stock that has a negative price should be investigated as the company may have liabilities that are in excess of the assets.

User Moustacheman
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