Given the following data for ABC and LMP companies, answer questions 1 and 2 below:

1. The. dividend growth rates for LMP and ABC respectively, are equal to: *

8 points

a. 19.28%; 15.96%

b. 15.96%; 19.28%

c. 17.80%; 8.59%

d. 8.59%; 17.80%

e. None of the above

2. The market capitalization rate of LMP exceeds that of ABC by: *

7 points

a. 11.27%

b. 11.53%

c. 12.56%

d. 12.85%

e. None of the above

LMP Company ABC company $2 $3.5 65% 52% 9% 9% Dividends per share (DPS) at t=0 Dividend payout ratio Market risk premium Stock price using DDM model Number of shares outstanding Total equity Beta $42 $55 1 million 0.8 million $12.53 million $14.52 million 1.2 1.4