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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
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. Ob $9.76: Should purchase, Buffalo's stock is underpriced. Oc$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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