Stock valuation from information on two companies and the market risk-free rate

timer Asked: Sep 29th, 2015

Question description

Company A pays $2 dividend on average every year and its share price is $18. Also, the risk-free rate in the market is 3%. Another company, company B, pays $3 dividend on average every year and its dividends are as uncertain as company A’s dividends. What is the share price of company B?

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