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Ado Supplies Ltd. currently doesn't pay any dividends but is expected to start paying dividends in five years. The first dividend is expected to be

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Ado Supplies Ltd. currently doesn't pay any dividends but is expected to start paying dividends in five years. The first dividend is expected to be $1 and is expected to grow at 3% thereafter. The required rate of return for the firm is 10 percent. What is Buffalo's current stock price? If the current market price of Buffalo's stock is $12, should you purchase it? Why? O a $9.76; Should NOT purchase; Buffalo's stock is overpriced. O b. $9.76; Should purchase, Buffalo's stock is underpriced. O c. $12; Should purchase: Buffalo's stock is fairly priced. Od $8.87: Should NOT purchase; Buffalo's stock is overpriced. Oe. $8.87. Should purchase; Buffalo's stock is underpriced

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