  Dividend discount models have been developed in a deterministic setting. Some
authors (Hurley and Johnson, 1994 and 1998; Yao, 1997) have introduced
randomness in terms of stochastic growth rates, delivering closed-form
expressions for the expected value of stock prices. This paper extends such
previous results by determining a formula for the covariance between random
stock prices when the dividends' rates of growth are correlated. The formula is
eventually applied to real market data.
