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Bonnie and Clyde are both considering an investment in the stock of PhillyETC. Based on the constant-growth dividend discount model, they both agree on the
Bonnie and Clyde are both considering an investment in the stock of PhillyETC. Based on the constant-growth dividend discount model, they both agree on the same valuation of the stock. However, Bonnie believes that the dividend growth rate will be 5%, while Clyde expects dividends to grow at 2%. What are Bonnie and Clyde's relative required returns for PhillyETC? o Bonnie required return Clyde required return O They both have the same required return
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