Bob and lois whiston are a middle-aged couple who would, Ask an Expert

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Bob and Lois Whiston are a middle-aged couple who would like to add an equity investment to their portfolio. They require a 12% rate of return and are considering the purchase of one of the following two common stocks: Stock 1: dividends currently are $1.50 annually and are expected to increase 8% annually; market price = $35 Stock 2: dividends currently are $2.25 annually and are expected to increase 7% annually; market price = $50 Which stock would be more appropriate for the Whistons to purchase at this time, using the dividend valuation model?

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Financial Management, Finance

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