Explore BrainMass
Share

Explore BrainMass

    Statement Response: payback rule, IRR rule, stock prices

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    1. "You say stock price equals the present value of future dividends? That's crazy! All the investors I know are looking for capital gains."

    2.. "I like the IRR rule. I can use it to rank projects without having to specify a discount rate."
    3. "I like the payback rule. As long as the minimum payback period is short, the rule makes sure that the company takes no borderline projects. That reduces risk."

    © BrainMass Inc. brainmass.com October 10, 2019, 7:32 am ad1c9bdddf
    https://brainmass.com/business/dividends-stock-repurchase-and-policy/statement-response-payback-rule-irr-rule-stock-prices-585861

    Solution Summary

    The solution responds to three statements on capital budgeting.

    $2.19