1. The common stock of ISPO is expected to pay a dividend of $10. If the stock is currently selling for $55 and the growth rate in dividends is expected to be 2%, what is the expected return of this stock?

2. You recently calculated the expected return for a stock to be 14%. If the stock has a required return of 10%, should you buy or not buy (sell) this stock?

		Buy because it is undervalued
		Buy because it is overvalued
		Sell because it is undervalued
		Sell because it is overvalued