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Suppose we have two companies, A and B, and it is expected both will pay a dividend of $1.50 per share every year forever. However,

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Suppose we have two companies, A and B, and it is expected both will pay a dividend of $1.50 per share every year forever. However, the stock price of A is higher than the stock price of B. Which of the following must be true? Stock A is overpriced. Stock B is underpriced. The market is irrational The equity cost of capital (rp) of B is more than the one of A

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