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Each of two stocks, A and B, is expected to pay a dividend of $5 in the upcoming year. The expected growth rate of dividends

Each of two stocks, A and B, is expected to pay a dividend of $5 in the upcoming year. The expected growth rate of dividends is 4% for both stocks. You require a return of 9% on stock A and a return of 8% on stock B. Using the constant-growth DDM, the intrinsic value of stock A _________.

A.

will be higher than the intrinsic value of stock B

B.

will be the same as the intrinsic value of stock B

C.

The answer cannot be determined from the information given

D.

will be less than the intrinsic value of stock B

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