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Consider the two corporations A and B. Assume that the annual interest rate is 10% for both corporations. The stock price per share of Corporation
Consider the two corporations A and B. Assume that the annual interest rate is 10% for both corporations. The stock price per share of Corporation A is $10 higher than the stock price per share of Corporation B. Corporation A is committed to paying a growing stream of dividends at the end of each year forever. The dividend at the end of the first year is $10 per share. Then, the dividend will grow at constant rate equal to 5%. What is the stock price of Corporation B?
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