3. In the table below you can find the earnings per share (EPS) and dividend per share (DPS) information for General Electric (GE) and General Motors (GM). For each company, please explain whether it is appropriate to use DDM to value the stock. (3 points)

Year Company EPS($) DPS ($) 2001 GENERAL ELECTRIC CO 1.38 0.64 2002 GENERAL ELECTRIC CO 1.42 0.72 2003 GENERAL ELECTRIC CO 1.5 0.76

2004 GENERAL ELECTRIC CO 1.62 0.8 2005 GENERAL ELECTRIC CO 1.58 0.88 2006 GENERAL ELECTRIC CO 2.01 1 2007 GENERAL ELECTRIC CO 2.18 1.12

Year Company EPS($) DPS ($) 2001 GENERAL MOTORS CO 1.78 2 2002 GENERAL MOTORS CO 3.37 2 2003 GENERAL MOTORS CO 7.24 2 2004 GENERAL MOTORS CO 4.97 2 2005 GENERAL MOTORS CO -18.69 2 2006 GENERAL MOTORS CO -3.5 1 2007 GENERAL MOTORS CO -68.45 1