Question: Marks Ado Supplies Ltd. currently doesn't pay any dividends but is expected to start paying dividends in three years. The first dividend is expected to

Marks Ado Supplies Ltd. currently doesn't pay any dividends but is expected to start paying dividends in three years. The first dividend is expected to be $2 and is expected to decline at 1% thereafter. The required rate of return for the firm is 7.5 percent. What is Ado's current stock price? If the current market price of Ado's stock is $20, should you purchase it? Why? O a $20.36. Should NOT purchase: Ado's stock is overpriced. ob. $18.94: Should NOT purchase: Ado's stock is overpriced. oc $20.36; Should purchase: Ado's stock is fairly priced: d. $18.94: Should purchase: Ado's stock is underpriced. e. $20.36; Should purchase: Ado's stock is underpriced

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