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Which of the following stocks is most likely to be priced highest? Assume that all stocks pay $3 dividend per share per year and are
Which of the following stocks is most likely to be priced highest? Assume that all stocks pay $3 dividend per share per year and are the same in all other aspects.
a)A stock whose annual dividend is expected to grow by 12% for the first two years and then 4% thereafter, with the discount rate of 12%.
b)A stock whose annual dividend is expected to not grow, with the discount rate of 12%.
c)A stock whose annual dividend is expected to grow by 4% per year forever, with the discount rate of 12%.
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