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Assume there are three companies that in the past year paid exactly the same annual dividend of $2.32 a share. In addition, the future annual
Assume there are three companies that in the past year paid exactly the same annual dividend of $2.32 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=12%). 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? a. For Buggies-Are-Us, the value of the company's common shares is $ (Round to the nearest cent.)
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