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Question 8 a. Consider the following stocks: Stock A is expected to pay a dividend 10 next year then 5 forever; Stock B is expected

Question 8 a. Consider the following stocks: Stock A is expected to pay a dividend 10 next year then 5 forever; Stock B is expected to pay a dividend of 5 next year with dividend growth expected to be 4% per annum thereafter. If the required return on similar equities is 8%, calculate the price of each stock. (6 marks)
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a. Consider the following stocks: - Stock A is expected to pay a dividend E10 next year then 5 forever; - Stock B is expected to pay a dividend of E5 next year with dividend growth expected to be 4% per annum thereafter. If the required return on similar equities is 8%, calculate the price of each stock. (6 marks)

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