Assume there are three companies that in the past year

paid exactly the same annual dividend of $$2\mathrm{.}65$ a share.

In addition, the future annual rate of growth in dividends

for each of the three companies has been estimated

as follows:

Assume also that as the result of a

strange set of circumstances, these three companies all

have the same required rate of return $(r=11\%).$

a$.$ Use the appropriate DVM to value each of these

companies.

b$.$ Comment briefly on the comparative values of these

three companies. What is the major cause of the

differences among these three valuations?$($Click on the icon here $$ in order to copy the contents of the data table

below into a spreadsheet.$)$