1. The common stock of ISPO is expected to pay a dividend of $4. 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. AC's common stock just paid a $7 dividend. If the stock is currently selling for $30 and the growth rate in dividends is expected to be 5%, what is the expected return of this stock?

3.

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?

Answers:	Buy because it is undervalued
	Buy because it is overvalued
	Sell because it is undervalued
	Sell because it is overvalued