The first stock pays a current dividend of $2 which is growing at 3% per year. The

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The first stock pays a current dividend of $2 which is growing at 3% per year. The cost of equity is 9% and the WACC is 7%. Based on this info what should you do if the stock is trading at $29.50 a share?

a. Buy it as the intrinsic value of the stock is just over $34

b. Short or sell the stock as the intrinsic value of the stock is under $26 a share

c. Buy it as the intrinsic value is $33.33

d. Buy is as the intrinsic value is just over $51

Related Book For answer-question

Management Science The Art of Modeling with Spreadsheets

ISBN: 978-1118582695

4th edition

Authors: Stephen G. Powell, Kenneth R. Baker

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Posted Date: Feb 04, 2024 01:34 AM

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Management Science The Art of Modeling with Spreadsheets

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