Assume there are three companies thet in the past year paid exactly the same annual divdend ot $2 84 a share. In addition, the tuture annualate ot growth in dividends tor each at the three companies has been estimated as tollows: (Click on the icon located on the top right corner of the date table below in order to copy its contents into spredsheet Buggies-Are-Us Steady Freddie, Inc Buster S3.1 i.e., dividends are expected to remain at $2.04 shae for the foreseeable future) 4.04 4.54 Year 5 and beyond: g 1% Assume also that as the result of a strange set of circumstances, these three companies all have the same required rate of return (r-8%) a, Use axropriale DVM lo valu each of these coripanies b. Comment briefly on the comparatw values ct these? three rompanies what 1h major rause otlhe ditterences among these three valuations? a. For Dusgies-Ar-Us. Uhe value of the ompanvy's coiori shares is S_(Round lo lheneasl cenl.) For Sleady Freddie, Irc, he value of lhe cumpany's comion shares is S (Round lo lhe nearest cel.) Hor Gang Buster Group, the value at the company's common shares is S(Round to the nearest cent. OA. The value of Buggies-Are-Us is S35.50, compared to $73.75 for Steady Freddie, Inc and $99.31 for Gang Busters Group. The difference in values is caused by the difference in dividend growth rates. The Bupgies Are-Us dividends do not grow resulti g in the l est valu The d end of St ady Fro do Inc gr at a o st 1 3 of 4 for er, h as Gang Du 1er Group s dividend The higher growth in dividends in the earlier years causes the stock of Gan Busters Group to be worth more than the Sleady Freddie, Inc., stock. go at approx alcly 12% for th first ur y ars and 4% r om year r o to the too cable future O B. The value of Buggies-Are-Us is S35.50, compared lo $73.75 fo Sleady Freddie, and $09.31 orI Gan Busters Group. The differerice in values is caused by the d Terence in dividend growth rales. The Bugies-Are-Us divideds do riol grow resulting in the est value The div ends teady Fredde. Inc gro at a cnstant rate of 4 torever wher a Gan Fi ters Gro p div ends The higher growth in dividends in the earler years causes the stack of Gang Busters Group to be worth more than Steady Freddie, Inc., stock w at approximate 12% r th rst 10 r ears and 8 from year we to the res abie ture