Red Inc. Yellow Corp. and Blue Company each will pay a dividend of $3.25 next...
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Red Inc. Yellow Corp. and Blue Company each will pay a dividend of $3.25 next year. The growth rate in dividends for all three companies is 4 percent. The required return for each company's stock is 8 percent, 11 percent and 14 percent, respectively. What is the stock price for each comapny? What do you conclude about relationship between the required return and the stock price?
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