Throughout this problem assume that all cash flows are realized at the end of any given period. All periods are one year long. The risk free interest rate is 6% per year, while the cost of equity is 7% per year for all companies under consideration.

Company A will make a dividend payment of $10 in one year, which will then grow at a rate of 1% per year for ever after. Company B has a dividend policy that amounts to a 10-year annuity with the first dividend payment one year from now.

Question: For which yearly dividend payment is the stock price of company B equal to the stock price of company A?