Multiple Choice
A stock recently paid a dividend of $2.5 per share. Its growth rate is expected to be 8%. Investors require a 10% return. The stock is selling in the market for $150. What is this stock worth and is the stock undervalued or overvalued?
A) $125; undervalued
B) $125; overvalued
C) $135; undervalued
D) $135; overvalued
Correct Answer:
Verified
Correct Answer:
Verified
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