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