52-Week Price Hi 77.40 55.81 130.97 50.24 35.00 Lo 10.43 33.42 69.70 13.95 20.74 Stock (Div) Palm Coal 0.36 Lake Lead Grp 1.54 (Click to select) Correctly valued Undervalued Overvalued SIR 2.20 DR Dime 0.80 Candy Galore 0.32 Div Yld % 2.6 3.8 2.5 5.2 1.5 PE Ratio 6 25.33 10 106 Close Price 13.90 10 40.43 28 89.01 15.43 ?? According to your research, the growth rate in dividends for SIR for the next five years is expected to be 19.5 percent. Suppose SIR meets this growth rate in dividends for the next five years and then the dividend growth rate falls to 5 percent indefinitely. Assume investors require a return of 15 percent on SIR stock. Requirement 1: According to the dividend growth model, what should the stock price be today? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Current stock price Requirement 2: Based on these assumptions, is the stock currently overvalued, undervalued, or correctly valued? Net Chg -0.24 -0.01 3.07 -0.26 0.18

According to your research, the growth rate in dividends for SIR for the next five years is expected to be 19.5 percent. Suppose SIR meets this growth rate in dividends for the next five years and then the dividend growth rate falls to 5 percent indefinitely. Assume investors require a return of 15 percent on SIR stock. Requirement 1: According to the dividend growth model, what should the stock price be today? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Requirement 2: Based on these assumptions, is the stock currently overvalued, undervalued, or correctly valued