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Many companies with equal risk; which will have the highest stock prices?

Assume you are looking at many companies with equal risk; which ones will have the highest stock prices?

Solution Preview

By the DDM model, we have the stock pricing formula:
P = D1 / (k-g)
where D1 is the dividend next ...

Solution Summary

The solution shows the formula, explains the formula and tells which types of companies will have the higher stock prices.

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