Comment on the validity or lack thereof of the statement

Reference no: EM131329228

1. The value of common stocks cannot be tied to the present value of future dividends because most firms don't pay dividends. Comment on the validity, or lack thereof, of this statement.

2. A common fallacy in stock market investing is assuming that a good company makes a good investment. Suppose we define a good company as one that has experienced rapid growth (in sales, earnings, or dividends) in the recent past. Explain the reasons why shares of good companies may or may not turn out to be good investments.

Reference no: EM131329228

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