M&B3 3rd Edition by Dean Croushore

Exercise 9

Which of these three stocks would you rather own if your rate of discount is 5 percent
a A stock that currently earns $2 per share whose earnings are growing 3 percent each year.
b A stock that currently earns $1 per share whose earnings are growing 4 percent each year.
c A stock that currently earns $5 per share whose earnings are growing 2 percent each year.