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Question: Here are two companies: Young corporation and Mature corporation. Young Corporation grows very rapidly, does not pay any dividends and retains all its profits. Mature Corporation stopped growing a long time ago, generates sizable cash flows and pays out dividends.

2481_Young.png

Calculate:

• Young's yearly returns.

• Mature's yearly returns.

• Which is the better investment of the two? Give a brief explanation.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M92285874

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