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How stock prices depend on future dividends and dividend growth. Stock Valuation and Required Return Red, Inc., Yellow Corp., and Blue Company each will pay
How stock prices depend on future dividends and dividend growth. Stock Valuation and Required ReturnRed, Inc., Yellow Corp., and Blue Company each will pay a dividend of $3.25 next year. The growth rate in dividends for all three companies is 4 percent. The required return for each company's stock is 8 percent, 11 percent, and 14 percent, respectively. What is the stock price for each company? What do you conclude about the relationship between the required return and the stock price? Must use Excel formula and provide the excel attachment
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