What is the economic intuition behind the difference between the perpetual bond formula and the...
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What is the economic intuition behind the difference between the perpetual bond formula and the constant gordon growth model, ? Stock and bond investors have homogeneous expectations for the two securities Stock investors prefer diviend gains while bond investors prefer capital gains Bond investors prefer cash flow with maturity while stock investors prefer perpetual cash flow stream Stock and bond investors have different sets of interest with respect to the firm's future growth potentials
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