Marcy may add 100 shares of LKM corporation stock to her investment portfolio. The stock recently paid a dividend of $1.85 per share. The dividend is expected to grow at a constant rate of 2.25% per year. Her required rate of return is 7%. The stock is currently trading for $35.75 per share. Determine whether she should purchase the stock and why

Answer rating: 100% (QA)

To determine whether Marcy should purchase the stock we can use the Dividend Discount Model DDM form... View the full answer