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Business, 12.10.2020 14:01 OperatorBravo

Consider the following three stocks: Stock A is expected to provide a dividend of $11.20 a share forever.
Stock B is expected to pay a dividend of $6.20 next year. Thereafter, dividend growth is expected to be 6.00% a year forever.
Stock C is expected to pay a dividend of $4.80 next year. Thereafter, dividend growth is expected to be 22.00% a year for five years (i. e., years 2 through 6) and zero thereafter.

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If the market capitalization rate for each stock is 10%, which stock is the most valuable?

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