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The current stock price of LMN Inc. is $5 higher than that of PQR Corp. If the two stocks have the same required return of

The current stock price of LMN Inc. is $5 higher than that of PQR Corp. If the two stocks have the same required return of 10% and are expected to pay the same dividends from year 2 onwards, which of the following is true about their Year 1 dividend?

Question 16 options:

LMN's dividend is expected to be $5.5 lower than PQR's

LMN's dividend is expected to be $5 higher than PQR's

LMN's dividend is expected to be equal to PQR's

LMN's dividend is expected to be $5.5 higher than PQR's

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