You own a stock of a Fortune 500 corporation. During the last three years, earnings have grown at 8% annually (compounded). The company leads in its segment and pays a dividend which offers a 3% return on the value of the stock, which is now 25% higher than when you bought it 3 years ago. A major article in the Wall Street Journal raises questions about I.T. overspending for this company and the stock price drops to a 3 year low in a week. What do you do with your holdings AND WHY?

Answer rating: 100% (QA)

EPS has grown by 8 compounded in the last 3 years The value of the stock ... View the full answer