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A stockbroker at Investing Inc., is trying to sell you a stock with a current market price of $5. The stocks last dividend (Do) was

A stockbroker at Investing Inc., is trying to sell you a stock with a current market price of $5. The stocks last dividend (Do) was $1.15, and earnings and dividends are expected to increase at a constant growth rate of 7%. Your required return on this stock is 12%. Find the Intrinsic Price of the stock.

Based on the results on the above problem and from a valuation standpoint, the stock is *

Overvalued

Undervalued

Fairly Valued

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