You are considering buying the stocks of two companies that operate in the same industry. They have very similar characteristics except for their dividend payout policies. Both companies are expected to earn $3 per share this year; but Company D (for dividend) is expected to pay out all of its earnings as dividends, while Company G (for growth) is expected to pay out only one-third of its earnings, or $1 per share. Ds stock price is $25. G and D are equally risky. Which of the following statements is most likely to be true?

a. Company G will have a faster growth rate than Company D. Therefore, Gs stock price should be greater than $25.

b. Although Gs growth rate should exceed Ds, Ds current dividend exceeds that of G, which should cause Ds price to exceed Gs.