You want to earn a return of 10% on each of two stocks, A and B. Stocks A and B are expected to pay dividends of $4 and $5 per share in the upcoming year, respectively. The expected growth rate of dividends is 7% for stock A and 6% for stock B. Using the constant-growth DDM, the intrinsic value of stock B _________.

Multiple Choice

A)will be the same as the intrinsic value of stock A

B)will be higher than the intrinsic value of stock A

C)will be less than the intrinsic value of stock A

D) The answer cannot be determined from the information given.