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- Financial information for four companies is provided in the following table:
| | Company A | Company B | Company C | Company D |
| Last Dividend | $0.50 | $0.75 | | |
| Expected Dividend | | | $1.25 | $0.90 |
| Required rate of Return | 15% | 14% | 17% | 12% |
| Growth Rate #1 | 10.00% | 9.00% | 7.00% | 8.00% |
| Growth Rate #2 | 5.00% | 3.00% | 4.00% | 2.00% |
| Growth Rate #1 Time | 5.00 years | 3.00 years | 4.00 years | 2.00 years |
| Transition Period | 3.00 years | 2.00 years | 4.00 years | 3.00 years |
| Quoted Price | $6.88 | $8.00 | $10.50 | $9.00 |
If you expect that the dividend of each company will grow at rate #2 into the foreseeable future (g is
constant), at what price would you be willing to buy each of these stocks?
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