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The stock of Rand, Inc. and McNally Corp. are set to pay the same dividend today, and are projected to have the same constant growth
The stock of Rand, Inc. and McNally Corp. are set to pay the same dividend today, and are projected to have the same constant growth rate in dividends for ever. From this we may infer that
A. Both stocks will trade at the same price.
B. The stock of Rand, Inc. will trade at a higher price than the stock of McNally Corp.
C. The stock of Rand, Inc. will trade at a lower price than the stock of McNally Corp.
D. Prices of the two stocks can be different since their required rates of return could be different.
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