4 16 ints eBook Print References You've collected the following information from your favorite financial website. 52-Week Price Lo 47.80 Acevedo 1.12 70.28 Georgette, Incorporated 2.50 143.13 YBM 6.45 64.13 96.20 Manta Energy 3.12 Winter Sports 1.57 Hi 64.60 145.94 181.19 82.56 113.19 Stock (Dividend) a. Current stock price b. Valuation $ Dividend Yield % 1.9 2.1 3.9 4.3 1.9 PE Ratio Close Price 62.91 35.6 70.9 118.64 23.8 165.39 17.6 72.56 15.5 ?? According to analysts, the growth rate in dividends for YBM for the next five years is expected to be 8 percent. Suppose YBM meets this growth rate in dividends for the next five years and then the dividend growth rate falls to 3.5 percent, indefinitely. Assume investors require a return of 10 percent on YBM stock. 165.38 Overvalued Net Change -.05 -.62 a. According to the dividend growth model, what should the stock price be today? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. Based on these assumptions, is the stock currently overvalued, undervalued, or correctly valued? .19 .84 .10

You've collected the following information from your favorite financial wobsite. According to analysts, the growth rate in dividends for YBM for the next flve years is expected to be 8 percent. Suppose YaM meets this growth rate in dividends for the next five years and then the dividend growth rate falls to 3.5 percent, indefinitely. Assume investors require a return of 10 percent on YBM stock. a. According to the dividend growth model, what should the stock price be today? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. Based on these assumptions, is the stock currently overvalued, undervalued, or correctly valued