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Two companies A and B are expected to pay the same dividend $3.55 next year, and have the same long-term constant growth rate of 6.5%.

Two companies A and B are expected to pay the same dividend $3.55 next year, and have the same long-term constant growth rate of 6.5%. If the stock price of company A is larger than Bs stock price, which of the following is correct according to the constant growth model?

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