The model of discount of dividends (MDD) estimates the price of the stock as S(t) = n(t. E. (d) n=1 where tn, n =1,2,... are the dividend paying dates, dn is the dividend paid per share at time on, and D(tn) is the discount factor for time tn. In the following, we have the estimates (expected values) of dividends from companies A and B, for the next 20 years (assuming that they will last that long, and dividends are paid at the end of the year). Find the estimate of the stock prices from this model using the flat interest rates 2% and 5% respectively, with annual compounding, for both stocks and compare the impacts of the interest rate on these two stocks. Table 1: Estimated Dividends Year Expected Dividend for A Expected Dividend for B 1 5 0 2 5 0 3 5 0 4 5 0 5 5 0 6 6 1 7 6 2 8 6 3 9 6 4 10 6 5 11 7 6 12 7 7 13 7 8 14 7 9 15 7 10 16 6 11 17 6 18 6 19 6 14 20 6 15 12 13