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A stock trades for $15, has earnings per share of $1.50 and does not pay a dividend. You think the stock will grow faster than
A stock trades for $15, has earnings per share of $1.50 and does not pay a dividend. You think the stock will grow faster than the market for three years and then grow at the rate of an average company. If the market has a P/E of 10, the P/E Model would suggest that you:
A. Buy the stock
B. Short the stock
C. Buy the stock in three years
D. Wait for the company to declare a dividend before buying
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