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Intrinsic Value Suppose, you are planning to invest in Xiaomi and Vivo stocks to earn a return of 10% on Xiaomi and 7% on Vivo.

Intrinsic Value Suppose, you are planning to invest in Xiaomi and Vivo stocks to earn a return of 10% on Xiaomi and 7% on Vivo. Xiaomi and Vivo are expected to pay 40 and 60, respectively, as dividends next year. Both the companies will continue to pay the same dividend forever, assuming that their total earnings are paid as dividends. Using the DDM, which of the following is true regarding the intrinsic value of the stock of Xiaomi? (Disclaimer: The values are samples for illustrative purpose only.)

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