Question: (b) ABC plc and DEF plc have exactly the same risk, and both have a current stock price of 150. ABC plc pays no dividend

(b) ABC plc and DEF plc have exactly the same risk, and both have a current stock price of 150. ABC plc pays no dividend and will have a price of 200 one year from now. DEF plc pays dividends and will have a price of 180 one year from now, after paying the dividend. The companies pay no taxes. Investors pay no taxes on capital gains but pay a 20% income tax on dividends. What is the value of the dividend that investors expect DEF plc to pay one year from today? Show your working, and state your reasoning

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