As an analyst for Old Money bank you are responsible for making recommendations to your company's clients regarding common stocks. After gathering data on Sitwell Industries you have found that its dividend has been growing at a rate of 6% per year to its current valu of $0.95 per share. The stock is currently selling at $26 per share and you believe that an appropriate discount rate is 11%. A - If you expect that the dividend will continue to grow at 6% for the foreseeable future. What is the highest price you would recommend your clients purchase the stock at. $ Stock Price Current Dividend Growth Rate Require Return Valuation 26.00 0.95 6% 11% B - Based on your valuation would you say the stock is overvalued or undervalued? Overvalued or Undervalued? C-Suppose that after looking into the company more closely you decide that the company's getting close to being mature and you think that the dividend will only grow at 6% for five more years and then after that will only grow at 3%. What is your new valuation? $ 26.00 0.95 6% Stock Price Current Dividend Growth Rate 1 Growth Rate 2 Rapid Growth Time Require Return Valuation 3% 5 years 11% As an analyst for Old Money bank you are responsible for making recommendations to your company's clients regarding common stocks. After gathering data on Sitwell Industries you have found that its dividend has been growing at a rate of 6% per year to its current valu of $0.95 per share. The stock is currently selling at $26 per share and you believe that an appropriate discount rate is 11%. A - If you expect that the dividend will continue to grow at 6% for the foreseeable future. What is the highest price you would recommend your clients purchase the stock at. $ Stock Price Current Dividend Growth Rate Require Return Valuation 26.00 0.95 6% 11% B - Based on your valuation would you say the stock is overvalued or undervalued? Overvalued or Undervalued? C-Suppose that after looking into the company more closely you decide that the company's getting close to being mature and you think that the dividend will only grow at 6% for five more years and then after that will only grow at 3%. What is your new valuation? $ 26.00 0.95 6% Stock Price Current Dividend Growth Rate 1 Growth Rate 2 Rapid Growth Time Require Return Valuation 3% 5 years 11%