1. Assume there are three companies that in the past year paid exactly the same annual dividend of USD2.25 a share. In addition, the future annual rate of growth in dividends for each of the three companies has been estimated as follows:

Buggies-Are-Us	Steady Freddie, Inc.	Gang Buster Group
g=0 (ie. dividends are expected to remain at USD2.25 per share)	g=6% (for the foreseeable future)	Year 1	USD2.53
		2	2.85
		3	3.20
		4	3.60
		Year 5 and beyond: g= 6%

Assume also that as the result of a strange set of circumstances, these three companies all have the same required rate of return (k=10%).

1. Use the appropriate Dividend Value Model (DVM) to value each of these companies.
2. Comment briefly on the comparative values of these three companies. What is the major cause of the differences among these three valuations?

PLEASE DO NOT ANS IN EXCEL FORMAT AND STATE ALL THE FORMULAS USED CLEARLY. TQ