Question: 1)Dividend Growth Model: Under what two assumptions can we use the dividend growth model to determine the value of a share of stock? Comment on

1)Dividend Growth Model: Under what two assumptions can we use the dividend growth model to determine the value of a share of stock? Comment on the reasonableness of these assumptions?

2)Common versus Preferred Stock: Suppose a company has a preferred stock issue and a common stock issue. Both have just paid a $4 dividend. Which do you think will have a higher price, a share of the preferred or a share of the common stock?

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