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5. Red, Inc., Yellow Corp., and Blue Company each will pay a dividend of $2.00 next year. The growth rate in dividends for all three
5. Red, Inc., Yellow Corp., and Blue Company each will pay a dividend of $2.00 next year. The growth rate in dividends for all three companies is 4 percent. The required return for each companys stock is 8 percent, 10 percent, and 12 percent, respectively. a) What is the stock price for Red Inc.? b) What is the stock price for Yellow Corp.? c) What is the stock price for Blue Company?
5. Red, Inc., Yellow Corp., and Blue Company each will pay a dividend of $2.00 next year. The growth rate in dividends for all three companies is 4 percent. The required return for each companys stock is 8 percent, 10 percent, and 12 percent, respectively.
a) What is the stock price for Red Inc.?
b) What is the stock price for Yellow Corp.?
c) What is the stock price for Blue Company?
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