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Question 5. A. A limited liability company has just issued dividends of $20. Its dividend payment history suggests that every year the dividends will increase

Question 5. A. A limited liability company has just issued dividends of $20. Its dividend payment history suggests that every year the dividends will increase by $1, so that next year it is expected to pay $21, the year after that $22, and so on, every year increasing by $1 forever. If the required rate of return for the company is 1% + 500 bps, what is the value of this stock? [5 marks] B. Assume that the growth rate for the public company in Question 4.B is 8%. Furthermore, assume that the required rate of return for the public company in Question 4.B and the limited liability company in Question 5.A are the same. At what required rate of return would their prices be equal? [5 marks]

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